Policy

Trump card: Delhi to get tough if US blocks Indian exports

Amiti Sen New Delhi | Updated on January 11, 2018 Published on May 04, 2017

The US has said it will seriously review its $24 billion trade deficit with India and find ways to address it.

PMO directs Ministries and Departments to identify areas where action is possible

India has decided to pro-actively find ways to counter possible moves by the Donald Trump administration to block Indian exports as part of the US Trade Department’s review process of the 16 nations with which the US has a trade deficit.

The Prime Minister’s Office has asked all Ministries and Departments to take note of items from their respective sectors that are imported from the US and which could be restricted through various means if required, a government official said.

“Since seeking a resolution at the World Trade Organisation is time-consuming, we need a back-up plan in case the US takes unwarranted steps to check imports from India. We have to be prepared to counter the move with similar measures,” the official said.

However, it might not be an easy exercise for India to identify imports from the US where there is a possibility of imposing restrictions.

“We import a lot of high-tech goods from the US. We absolutely need these items and there is little scope to impose restrictions here,” the official added. “Similarly, we import a variety of fruits and vegetables where we have already imposed high import duties. Finding additional ways to curb these will also be difficult,” the official noted. Import restrictions can be imposed through non-tariff measures, for instance, by rejecting consignments on grounds of low quality and standards.

“The fact remains that the Indian industry is more vulnerable than the American industry as we export much more to the US than we import. For instance, our sectors such as textiles and leather, which are labour-intensive, can take a big hit if the US decides to make its import policies unfavourable,” the official said.

Early last month, Trump signed an executive order launching a 90-day investigation of countries, including India, against which the US runs a bilateral trade deficit.

Assistant US Trade Representative Mark Linscott, in his recent discussions with officials from the Commerce Ministry in New Delhi, reiterated that his government would seriously look at the $24 billion trade deficit it has with India and find ways to address the situation.

New Delhi, however, has some time to prepare for any unfavourable action from the US as the review process by the US Commerce Department could stretch up to June-end.

Given the fact that it is China that contributes to half of the country’s total trade deficit — $347 billion of the total $648 billion — it could be Beijing, and not New Delhi, that faces the most severe measures, the official said.

Published on May 04, 2017

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