Hindustan Times - 03 March 2021
Make in India key to challenges in trade ties, says US
By Yashwant Raj
The Biden administration’s first substantive report outlining its trade agenda and policies has said that Prime Minister Narendra Modi’s Make in India initiative “epitomised” the trade-restrictive challenges — as seen by the United States — confronting trade ties between the two countries. Opening up markets and removing trade barriers will be a “priority” in President Joe Biden’s trade agenda, it added.
The report sent to US Congress — titled “2021 Trade Policy Agenda and 2020 Annual Report” — detailed the negotiations that took place between the two countries on an interim trade agreement over 2019-2020, calling it a “package of meaningful market access outcomes”, but offered no clues to how the new administration sees them and how it would like to proceed.
India has called for talks on a “fresh package”, and to this time go beyond the “nitpicking” and constant shifting of the goalpost that characterised the Trump administration’s approach.
The report identified “long-standing market access impediments affecting US exporters” as the key continuing American ask and concern. Trade frictions between the two countries, which exert the weightiest drag on ties that are otherwise on an upward trajectory, have outlasted several administrations in both countries, irrespective of the parties in power.
“While India’s large market, economic growth, and progress towards development make it an essential market for many US exporters, a general and consistent trend of trade-restrictive policies have inhibited the potential of the bilateral trade relationship,” the report said. India-US bilateral trade in goods and services stood at $146.1 billion in 2019. The potential is said to be many times more. President Biden, who visited India in 2013, had then said the target should be $500 billion.
“Recent Indian emphasis on import substitution through a ‘Make in India’ campaign has epitomized the challenges facing the bilateral trade relationship,” the President’s trade agenda released Monday said, identifying a programme launched by Prime Minister Modi in 2014.
“Opening markets and reducing trade barriers are fundamental to any trade agenda,” the report said generally of President Joe Biden’s trade agenda. “This will be a priority for the Biden administration, particularly since export-oriented producers, manufacturers, and businesses enjoy greater than average productivity and wages.”
The US has sought increased access for its companies to India’s dairy and poultry markets, wants medical devices to be freed from government-regulated pricing, and resolve issues regarding IT goods.
To force India to give in, former President Donald Trump had in June 2019 ended India’s access to a preferential US import promotion programme — the Generalized system of Preferences (GSP) — that allowed an estimated $6 billion worth of imports from India to enter the US duty-free.
India has blamed American trade negotiators for the failure to reach an agreement, by constantly changing, and upping, their demands. “I think the last time around when we were discussing, we were nitpicking with very small issues and changing the goalposts in every subsequent conversation,” Trade and Commerce Minister Piyush Goyal said in February.