India-US Economic Ties Awaits New Dawn

Context: The upcoming United State Presidential elections have economic and diplomatic ramifications for Indo-US relationship.

Strain in Indo-US Economic Relations 

• American Steps:
• Withdrawal of Generalised System of Preferences benefits: by US (i.e. duty free import tariffs) due to lack of market access provided to American products in India.
• The scheme launched in 1975 enables duty free import of goods into the US by developing countries.
• India was the largest beneficiary of GSP in 2017 with $5.7 billion worth of goods covered by it. 
• Tariff / import duties hikes: by US on Indian metal products like 25% on steel and 10% on aluminium.
• Restrictive visa policy of US for highly skilled Indian software professionals: adversely affects both the Indian and the American IT industries.

• Indian Steps:

• Retaliatory tariffs by India: India imposed tariffs on US imports including apples, almonds, chickpeas, lentils, steel and chemicals.

• President Trump was vocal about the high tariffs on imports of Harley Davidson motorcycles.
• Imposition of price caps on medical devices like stents and implants by India.
• Failure to allow market access to US dairy products on religious grounds and issues over India’s intellectual property rights regime.
• Continuation of foreign investment limits in key sectors like insurance, banking and retail.
• India’s proposals for a new e-commerce policy and data protection issues have also come under the spotlight amid the focus on swadeshi and the Atmanirbhar drive.

Conclusion: Indo-US relations must be strengthened on the economic and diplomatic grounds irrespective of the change in administration.