Commerce and Industry Minister Suresh Prabhu has said that the central government is actively working with the United States (US) to resolve all trade issues even as the US has decided to review India’s eligibility to enjoy duty-free access for certain products under a tax benefit scheme. He noted that the US treasury department also put India on a watch list of countries with potentially questionable foreign exchange and macroeconomic policies. Besides, he said that the US has dragged India to World Trade Organisation’s (WTO) dispute settlement mechanism challenging Indian export incentive schemes.
The minister has said that the US is an important trading partner of India. Noting that India’s largest trade surplus was with the US, he said that India enjoys a special relationship with the US, not just restricted to trade, but that is multi-dimensional and strategic. Further, he observed that more than four million Indians are living in the US and it is one of the major markets for goods and services exports. He noted that “In a situation like this, the US has taken certain unilateral actions. So we will follow the rules of WTO (World Trade Organisation) as well as we will talk to them. We are completely in the control of situation”.
Talking on the issue of slapping import tariffs of 25 percent on steel and 10 percent on aluminium by the US, Prabhu said India’s exports of these two commodities to America is not significant. He said “I can assure you one thing that the only guiding principle for engagement with the US is to protect India's commercial interest in its entirety”. He indicated that as many as 3,500 Indian products from sectors such as chemicals, medical devices and engineering get duty free access to the US market under the Generalized System of Preferences (GSP), introduced in 1976. He added that the review can impact exports of those 3,500 Indian products to the US market as removal of duty benefits would make those items uncompetitive.