The real deal: On India-U.S. trade deal (The Hindu)

Mains Paper 2 : International Relations
Prelims level : India-US trade deal
Mains level : Significance of the trade deal

Context

•  India and the United States failed to arrive at a limited trade deal that was to have been announced during this visit of Prime Minister Narendra Modi to the U.S.
•  The deal stumbled over duties imposed by India on ICT (information and communication technology) products the U.S. wanted the 20% duty on mobile phones and ethernet switches to be reduced or eliminated.

Key significance

•  America is also understood to have demanded greater access to the Indian market for medical devices such as stents and knee implants apart from its dairy and agricultural products.
•  These are sensitive products politically for the Indian side as Mr. Modi has often taken credit for making them affordable.
•  Loosening price controls now is not an option for India as that would push up prices of these products in the country.
•  India wanted the Generalised System of Preferences which gives preferential market access for its products in the U.S., restored.

Why the deal is so important for India?

•  These are so far as a “limited trade deal” goes; a full scale trade agreement would pose bigger challenges on issues such as intellectual property, e-commerce and the ticklish subject of H1B visas.
•  This is especially because trade talks with China are going nowhere. China has not only taken Mr. Trump’s punitive tariffs on its chin but has retaliated in kind, picking the products that could hurt his constituency and supporters.
•  This explains the hectic, behind-the-scenes activity with India in the last few weeks. With its economy in the grip of a major slowdown, any concessions from India on imports of American products may not have gone down well both politically and in economic terms.

Way forward

•  Going by the limited information in the public domain, it appears that India has played tough and refused to yield to U.S. demands.
•  Trade negotiations are never easy and for them to succeed, both sides have to believe in a policy of give and take. It does not help if one side tries to bulldoze the other into submitting totally to its interests.
•  At this point in time it does seem that even a limited trade deal between India and the U.S. is some distance away.

Prelims Questions:

Q.1) With respect to “World Food India (WFI) 2019”, consider the following statements:
1. It is the first edition of biennial event, which will in New Delhi.
2. It is the gathering of all global and domestic stakeholders in Food Processing Sector with the objective of promoting food processing sector at global level.
Which of the statements given above is/are correct?
a. 1 only
b. 2 only
c. Both 1 and 2
d. None

Answer: B
Mains Questions:
Q.1) The limited trade agreement between India and the U.S. is some distance away. Comment.