New Delhi: PM Narendra Modi’s visit to the US saw a positive turn of events for US-India trade relations as the two countries cleared several obstacles in trade, including six outstanding disputes at the World Trade Organization (WTO) as well as a decision by India to remove tariffs on 28 US goods.
US Trade Representative Katherine Tai, on Thursday, announced that the six disputes at the WTO – three initiated by India and the three initiated by the US – will be terminated.
A statement from Tai’s office revealed that these include disputes over carbon steel products, steel and aluminium goods, solar cells and solar modules, measures relating to the renewable energy sector, and more.
This came six months after the 13th Ministerial-level meeting of the US-India Trade Policy Forum was held.
India removes retaliatory tariffs
Meanwhile, New Delhi has agreed to remove retaliatory tariffs on 28 American products including chickpeas, lentils, almonds, walnuts, apples, boric acid, and diagnostic reagents, which were imposed by the capital city in response to measures taken by the former US President Donald Trump administration in 2018.
In March 2018, the Trump administration imposed 25 per cent and 10 per cent import duties on $761 million worth of steel and $382 million worth of aluminium respectively from India. This was carried out under US Section 232 which seeks to determine the effects of imports on American national security.
The decision by the Trump administration led to a major decline in India’s exports of aluminium and steel to the US over the following years and was taken up as a dispute at the WTO.
The US hike in import duties was met with an increase in tariff rates on 28 American products as high as 120 per cent in July 2018. The revised tariff rates came into effect a year later in June 2019. Responding to New Delhi’s decision, a top official from the US Trade Representative at the time, Deputy USTR Jeffrey Gerrish, had said this response was “not appropriate”.
With the lifting of these measures and the termination of the dispute at the WTO, the current US Trade Representative expects to “restore and expand” market opportunities for US agricultural producers and manufacturers.
“Prime Minister Modi’s visit has underscored the importance of the U.S.-India bilateral relationship and our cooperation on a range of shared priorities. Today’s agreement represents the culmination of intensified bilateral engagement over the last two years, including through the U.S.-India Trade Policy Forum, to deepen our economic and trade ties,” said Ambassador Tai.
In her statement, she added that these developments will also work to protect the “integrity” of the US Section 232 measures.