A Dialogue, an Opportunity (The Indian Express)

Mains Paper 5: Economy
Prelims level: GSP
Mains level: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Context

•  Trade issues are not a formal part of this week’s dialogue in Delhi between the visiting US Commerce Secretary Wilbur Ross and Union Commerce Minister Suresh Prabhu.
•  But there is no doubt that mounting trade tensions between India and the US have cast a dark shadow over the talks.

Withdrawing trade benefits impact

•  The immediate danger is that the US might withdraw India’s trade benefits under the so-called Generalised System of Preferences that Delhi has enjoyed since the mid-1970s.
•  Market access, reciprocity in tariffs, trade deficit, predictable investment rules and data localisation.
•  The first is to recognise the value of the trade relationship between the two countries and its huge potential.
•  “Flat as a chapati” annual two-way trade has grown rapidly to touch nearly $130 billion last year (including trade and services).

Way forward

•  For India, the US is probably the most important trade partner today and will remain so for a long time.
•  For Washington, the size of the trade volume with India is quite low in comparison with its other key partners like Canada, Mexico, the European Union, Japan and China.
•  But the potential remains high as India emerges as the world’s third-largest economy.
•  Both countries need to be sensitive to the domestic political considerations.
•  Trump has convinced himself that the rest of the world has taken advantage of America’s open market.
•  In India, successive Prime Ministers Atal Bihari Vajpayee, Manmohan Singh and Narendra Modi chose to defy conventional political and bureaucratic wisdom to advance the country’s relationship with the US.
•  Indian officials who negotiated the complex nuclear deal can recall how George W Bush repeatedly overruled objections of his cabinet colleagues.
•  Never stop negotiating and keep making deals small or big.

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

Prelims Questions:

Q.1) Which of the following is/are rain water harvesting systems found in different parts of India?
1. Bhungroo
2. Johad
3. Khadin

Select the correct answer using the code(s) given below:
(a) 1 only
(b) 1 and 2
(c) 2 and 3
(d) 1, 2 and 3

Ans: D

Mains Questions:
Q.1) What is GSP? Critically evaluate the impact on India after withdrawing trade benefits decisions taken by U.S..