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On trade issues India to work with United States commerce minister Prabhu

India is working with the United States to resolve all trade issues even as Washington has decided to review India’s eligibility to enjoy duty-free access for certain products under a tax benefit scheme.

The US has also added India to its watch list of countries alleging questionable foreign exchange policies. Besides, it has dragged India to the World Trade Organisation’s dispute settlement mechanism challenging Indian export incentive schemes.

Commerce Minister Suresh Prabhu said the US is India’s important trading partner and the latter has a large trade surplus with it. “We have special relation with the US, which is multi-faceted, multi dimensional and also very strategic. We are working with the US to address the trade issues,” he told reporters in New Delhi.

He said that over four million Indians are living in the US and it is one of the major markets for goods and services exports. “In a situation like this, the US has taken certain unilateral actions. So we will follow the rules of WTO as well as talk to them,” he added.

Prabhu said the assistant US trade representative (USTR) was in New Delhi last week and “we are in touch with the US at all levels”. On the issue of imposing high duties on steel and aluminium by the US, he said India’s exports of these two commodities to America are not significant.

The only guiding principle for engagement with the US is to protect India’s commercial interest in its entirety,” he added.

As many as 3,500 Indian products from sectors such as chemicals, medical devices and engineering get duty free access to the US market under the Generalized System of Preferences (GSP), introduced in 1976.

The review can impact exports of those 3,500 Indian products to the US market as removal of duty benefits would make those items uncompetitive.

According to the USTR, the total US imports under GSP in 2017 was 21.2 billion US Dollars, of which India was the biggest beneficiary with 5.6 billion US Dollars, followed by Thailand ($4.2 billion) and Brazil ($2.5 billion).

The bilateral trade between the countries has increased to 64.52 billion US Dollars in 2016-17 from 62.11 billion US Dollars in the previous fiscal.

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