Trade ‘protectionism’ to figure in US talks

Trade talks between India and the US are set to be tough as Washington wants to take up protectionism concerns related to Prime Minister Narendra Modi’s ‘Make in India’ programme.

But New Delhi holds the view that the recent increase in import tariffs on a number of items announced in the Budget were to protect the domestic industry and were not directed at a specific country, said officials.

“Recent announcements on ‘Make in India’ have made the protectionism concerns in India even greater. So we will be discussing those concerns. What we see is an increase in barriers, not a decrease, and will certainly come up among the leaders,” said senior administration officers from the US government in a briefing on Trump’s visit.

‘Not targetting the US’

“The announcements to strengthen the ‘Make in India’ programme by increasing import duties on non-essential items should be seen as measures to boost the economy, which is going through a rough patch and create jobs. This was certainly not targetted at American companies. This position will be made clear to the Americans if they make a big issue out of it,” an official told BusinessLine.

Trump earlier indicated that no big trade deal between India and the US will happen during his visit -25 and he was also not sure if it would be clinched before the US Presidential elections in November this year. One reason for the delay is Washington’s big wish-list which includes removal of price caps on medical equipment and greater market access for dairy products, mobile phones, motor bikes and high-end IT products and farm goods.

Although the US Trade Representative Robert Lighthizer, whose team is working on the India-US trade deal, will not be part of Trump’s delegation, US Commerce Secretary Wilbur Ross will participate in the trade talks. The delegation-level talks as well as meetings between officials from both countries will take place on February 25 in New Delhi.

US claims unfair treatment

The US has already penalised India for not providing “equitable and reasonable’’ market access to American companies by withdrawing the Generalised System of Preferences (GSP) that allowed duty-free access to over 3,000 items from India into the American market.

“Although the withdrawal of the GSP scheme does not affect a large proportion of India’s exports, New Delhi will certainly demand its restoration when the trade teams meet as it is a facility given to developing countries and India certainly qualifies,” the official said.