We have made an offer to America to help resolve difficult trade disputes, says Govt
New Delhi: The commerce ministry, after consulting various departments like IT and agriculture, has made an offer to the US to resolve trade issues between the two countries, Union Minister Suresh Prabhu said Wednesday. The US is demanding greater market access for its agricultural, dairy products and medical devices. Besides, it is seeking reduction in import duties on certain IT products and increasing their exports to bridge trade deficit with India.
Prabhu said that whatever the US is asking from India is concerned with different ministries, including IT and agriculture. "We have consulted all the ministries and we have given them an offer," the commerce and industry minister said when asked about the steps being taken to resolve trade issues with America. However, he did not disclose the details of the offer.
Although officials of India and the US have been negotiating a trade package, America last month announced to withdraw benefits being provided by them to Indian exports under their Generalised System of Preferences (GSP) programme.
The US has decided to go ahead with its decision to scrap the preferential trade benefit under GSP scheme after 60 days, which is expected to impact India's exports to the US worth USD 5.6 billion under this programme. Prabhu said that in the last one year, the US exports to India have increased by about 48 per cent and it does not include defence purchases made.
He also said that India would like to buy about 1,000 aircrafts from the world and the US could be one of the potential suppliers. Defence purchases and this kind of procurement is going to change the things dramatically with regard to trade balance, he added.
India's exports to the US in 2017-18 stood at USD 47.9 billion, while imports were USD 26.7 billion. The trade balance is in the favour of India. When asked about the government's plan to send an official delegation to the US for holding consultations, the minister said: "we have not yet decided".
Trade experts have stated that trade dialogue will help in resolving the issues as the US is one of the largest trading partners of India. The US is one of the few countries with which India has a trade surplus. Replying to a question about the reason behind extending the deadline again and again on imposing retaliatory tariffs on 29 US products, Prabhu said the US has not yet stopped the GSP benefits to Indian exporters.
The government has extended the deadline to impose retaliatory customs duties on products, including almond, walnut and pulses, till May 2.
As part of the proposed trade package, India is pressing for exemption from the high duty imposed by the US on certain steel and aluminium products, resumption of export benefits to certain domestic products under their GSP, greater market access for its products from agriculture, automobile, automobile components and engineering sectors. Prabhu said India's exports are expected to reach $32.38 billion in March, the highest in any month so far, on account of healthy growth in sectors such as pharmaceuticals. He said that exports would cross USD 331 billion mark in the 2018-19 fiscal year.
"We will at least have USD 331 billion (in 2018-19) and in the month of March, we will have USD 32.38 billion, the highest ever in any month," he added. He said that for the "first time", India has crossed USD 19 billion figure in pharma exports this fiscal. The commerce ministry will release the trade data on April 15. Prabhu said that the country's exports were declining for long time but now "this year, we would have record exports".
The figures in 2018-19 would be the highest ever at a time when there is a worst scenario in the world trade front, he said. The outbound shipments are growing because of concerted efforts by the ministry in the last one year, the minister said. "We created a matrix between every product and every geography. Secondly, we had done series of road shows," Prabhu said adding export potential was tapped in regions such as Africa and Latin America.
The ministry also held several meetings with then line ministries including food, agri, pharma and IT ministry to resolve issues hindering exports.
The World Trade Organisation (WTO) yesterday stated that the global trade will continue to face strong headwinds this year and in 2020 after growing slower-than-expected in 2018, due to rising trade tensions and increased economic uncertainty.
The minister said that India is recording a healthy growth in exports despite the fact that countries are putting barriers and following protectionist measures.
