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Find Out Those 28 US Goods on Which India Increases Tariffs Amid Trade Spat

The retaliatory move came days after Washington removed New Delhi from a list of countries that have preferential access to its market

FILE - Containers are piled up at a terminal at the Jawaharlal Nehru Port Trust in Mumbai, India, June 29, 2017. India’s commerce ministry says it will not try to hold onto its preferential zero-tariffs status with the United States. VOA

India has hiked tariffs on 28 goods imported from the United States as a trade spat between the two countries intensifies. The retaliatory move came days after Washington removed New Delhi from a list of countries that have preferential access to its market.

“India has put its cards on the table,” says trade expert Biswajit Dhar at Jawaharlal Nehru University in New Delhi. “The U.S. has upped the ante and it is also threatening to take further action. This required India to respond.”

The trade spat has escalated ahead of a visit later this month to New Delhi by U.S. Secretary of State Mike Pompeo who has pushed India to allow American companies more access to its markets and to lower barriers.

FILE – A female laborer winnows almonds inside a small-scale factory unit in New Delhi, Jan. 15, 2011. India is by far the largest buyer of U.S. almonds. VOA

Experts fear the growing tensions could cast a shadow over a deepening India-U.S. strategic partnership that aims at countering China’s growing influence.

The American goods that attract higher tariffs beginning Sunday include almonds, apples, walnuts, chickpeas and lentils, as well as some stainless steel products. New Delhi is the largest importer of U.S. almonds and the second largest buyer of apples. The total impact of the Indian tariffs is estimated to be about $240 million.

Increase deferred several times

The hike in duties by New Delhi was announced a year ago in retaliation for Washington’s imposition of higher tariffs on imported steel and aluminum, but deferred several times as both sides held talks to bridge their differences.

But India went ahead after the U.S. earlier this month imposed another punitive measure: removing New Delhi from a trade program to aid the economies of developing countries. Washington said the preferential status was revoked because India has failed to provide adequate access to its markets for U.S. firms. It will impact Indian imports worth $5.6 billion. New Delhi was the largest beneficiary of the Generalized Systems of Preferences program. India’s commerce ministry has called the decision unfortunate.

A shop in New Delhi sells almonds and walnuts, which are among the 29 U.S. products on which India has announced retaliatory tariffs starting August 4. India is the largest market for U.S. almonds. (A. Pasricha/VOA)

US markets

U.S. President Donald Trump has repeatedly named India as one of the countries that follow trade practices unfair to the United States. Washington wants New Delhi to address a trade imbalance, the $142 billion bilateral trade is skewed in New Delhi’s favor by about $30 billion.

Dhar says among the sticking points are the demands by Washington that India lower tariffs on dairy and poultry to encourage U.S. agricultural imports. But these are areas where New Delhi faces domestic challenges.

“India is battling with this very large population of small and marginal farmers. It is very difficult for India to drop tariffs specially as we know U.S. agricultural products are being subsidized,” according to Dhar.

U.S. Secretary of State Mike Pompeo addresses the India Ideas Summit in Washington, June 12, 2019. VOA

The United States is also concerned about recent rules that it says adversely impact the operations of its e-commerce companies such as Amazon and Walmart in India. Even though the moves by New Delhi and Washington signal that each is taking a tougher stand, they could also push both sides to more serious negotiations to resolve their differences.

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“We remain open to dialogue and hope that our friends in India will drop their trade barriers and trust in the competitiveness of their own companies, their own businesses, their own people,” Pompeo said at policy speech at the U.S. India Business Council in Washington on Thursday. He said that countries that have provided American companies access to their markets have seen “real opportunity.”

Pompeo will in New Delhi on June 25-26 to hold talks with his Indian counterpart. Indian Prime Minister Narendra Modi and U.S. President Trump are also expected to meet on the sidelines of the G-20 summit in Japan later this month. (VOA)

Next Story

Let’s Discuss Mutual Interests; Let’s Go Through Unified Understanding

Modi has to show diplomatic expertise. He knows that India cannot have enmity with the US

mutual interests
Mike Pompeo came in advance for the final round of Prime Minister Narendra Modi's face-to-face meeting with American President Donald Trump. Wikimedia Commons

US Secretary of State Mike Pompeo came in advance for the final round of Prime Minister Narendra Modi’s face-to-face meeting with American President Donald Trump. Trump sent him to fix the schedule of the two top leaders’ meeting. It was just before June 28 that a bilateral meeting would be held in the G-20 summit in Japan. But with Foreign Minister S. Jaishankar, Pompeo also held an advance meeting basically for themselves. Trump praised Modi with a tweet as soon as his second innings started, but his main goal was to ensure that India withdrew tax on US items – India has taxed medicine, cars, toys, and this tax had to be reduced.

US goods and services trade with India was estimated at $142.1 billion (2018). But the volume of this trade has now reduced. There is now a US trade deficit with India. There are complaints that India has increased tariffs in 29 of the US products that are coming into India.

Trump has opposed the buying of the S-800 TRIUMF missile system of India from Russia. From 2020, this missile will be available in India. According to the American consumers legislation, the US authorities are opposing this defence agreement. According to US law, the country will ban those who enter into a defence agreement with Russia. Again, the angry US authorities made it more difficult for Indians to get an opportunity to get H-1 visas. The cost of US visas has increased. As a result, Indian students and information technology workers are in trouble.

mutual interests
There is now a US trade deficit with India. Wikimedia Commons

There is also trouble on the Iran issue. In August 2012, the Trump administration issued fresh financial sanctions on Iran. US officials wanted India to freeze diplomatic ties with Iran, but New Delhi did not care about American threats. India did not change Modi’s policy on Iran. Understanding the situation in India, US officials have also given a concession to Iran on this issue till May this year. Now see what they do. In ‘self-interest’, there has been a peace deal with the Taliban in Afghanistan. Peace negotiations with the Taliban for India is not very happy news.

Support within the country is giving Modi the strength to fight a world leader like Trump. He is able to bargain. If a government is not backed by a majority in Parliament, if it is weak, or a patchwork coalition government, the government would be weak internationally.

However, the foreign policy of Trump is also difficult to understand – trade war with China; Russian sanctions; a shaky deal with North Korea; a fight with a neighbour like Canada and problems with Mexico. After the end of the Cold War, US relations with India have been consistently good. In 2008, George W. Bush and then Barack Obama finalised the nuclear deal with India. Then, the relationship between the two countries became stronger. After Trump became President, there were dark clouds over the bilateral relationship. But Trump is an amazing character. He often conflicts with a lot of small issues without emphasizing the large context of relations between two countries.

mutual interests
Modi has to show diplomatic expertise. He knows that India cannot have enmity with the US. Wikimedia Commons

Here, Modi has to show diplomatic expertise. So far, both Modi and Jaishankar have been successful on this front. Modi knows that India cannot have enmity with the US. However, submission in the name of friendship cannot be called successful diplomacy either. So both sides are seeking good relations, and Modi and Trump are fighting nervous wars in diplomatic negotiations.

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Meanwhile, another US presidential election is coming up. What if Trump is elected President once again? Ahead of the 2020 election, he is now becoming more conservative and more aggressive. The primary reading of foreign policy is that every sovereign state has some expectations which is called desire and real evaluation of how much is possible in the expectation is called effective desire or effective expectation. Now India should not expect that all claims of Modi will be accepted by Trump. Or India will accept all expectations of Trump. There is always a difference between these basic needs and effective demands. There is a conflict between the demands of the two sovereign states. The path of getting through these conflicts is wide.

All the countries are plagued by various problems today. The British ruled India once, but imagine what is happening in London today. In this situation, almost all sovereign states are becoming more protectionist. There is increasing nationalist Swadeshi conservatism but this mentality will increase conflict. So now let’s discuss mutual interests. Let’s go through a unified understanding. (IANS)