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India has been the single biggest beneficiary of the decades-old US Generalized System of Preferences programme, allowing the country to export $ 5.7 billion worth of duty-free goods in 2017, according to figures from US Congress.
Illustration: Uttam Ghosh/Rediff.com
The Trump administration has warned India that it would be compelled to take some "additional action" against the country over its "unfair" trade practices as the two nations have made "no headway" on these issues.
The warning from US Trade Representative Robert Lighthizer also came days after President Donald Trump announced that the US would end its preferential trade treatment for India on June 5.
India has been the single biggest beneficiary of the decades-old US Generalized System of Preferences (GSP) programme, allowing the country to export $ 5.7 billion worth of duty-free goods in 2017, according to figures from US Congress.
"We have spent a lot of time worrying about India. It is massive economy and it's going to only get bigger.
“It is a great opportunity for a lot of American farmers and businesses. Having said that, we have a series of problems with them, the things that we've raised with them over a period of months," Lighthizer said on Wednesday.
His comments came ahead of US Secretary of State Mike Pompeo's visit to India from June 25-27.
During a Congressional hearing, Lighthizer told the members of the House Ways and Means Committee that the Trump administration over the past few months did a review of GSP, after which President Donald Trump decided to take the GSP away.
"Because we made literally no headway on the issues over the course of months and months and months," he said.
"We are looking at a variety of other unfair actions (by India) that may provoke us to take some other kinds of, some additional action," Lighthizer said, responding to a question from Republican Congressman George Holding.
His remarks came days after India on Saturday announced a hike in customs duties on as many as 28 US products, including almond, pulses and walnut, in response to higher tariffs imposed by Washington on Indian products like steel and aluminium.
"They have a new government now. Obviously it's the same leader, but a new government...And I will talk to him in the next few days. My hope (is that) we can jumpstart and make some headway," Lighthizer said on a positive note.
At the same time, he alleged that India has about the "highest tariffs of any country you can imagine" in the world.
"They have a very status kind of an economy. It's very heavily regulated.
“They have created problems in the digital space, in the agriculture space, in regular manufacturing. I mean in retail, just across the board," he said.
Lighthizer was responding to a question from Congressman Holding.
"I think we have great opportunities with India. India is becoming more and more important partner with the US on military front. Trade opportunities are there," Holding said.
"The president is going to have the opportunity to meet with Prime Minister (Narendra) Modi at the G-20 summit.
“And before that I believe Secretary Pompeo will be in India meeting with the Prime Minister Modi, before the G-20,” he added.
"So...there are opportunities in India and are prepared to spend the resources and time to talk through the difficulties that we have.
“There are some trade controversies and there are a great trade opportunity there,” Holding said.
"With the election of a new prime minister there, I believe that he now has more of a mandate and a stronger hand to come and negotiate with us; a stronger hand trying to address the problems that he knows that he has in his country," he noted.
Holding said that there's a commitment within the new government in India to try to address some of the problems that they understand that they have.
Congressman Chris Smith in his remarks alleged that India provides support to its domestic cotton industry in violation of the World Trade Organisation.