HEADLINES:
December 14 2019
Option on capping exports to U.S. is still open, says Commerce Secretary
26 September 2018

India has right under WTO rules to impose import tariff increases within a band

India is not foreclosing the option of capping exports to the U.S., Commerce Secretary Anup Wadhawan said on Tuesday.

The effect of any such option would, however, be minimal on the domestic industry, he added.

Capping exports is among the demands raised by the U.S. in exchange for it waiving import duties on steel and aluminium from India.

Mr. Wadhawan said that India had the right under the World Trade Organisation rules to implement import tariff increases within a band.

He asserted that India would take advantage of this to protect its interests.

“We are not foreclosing any options, including the capping of exports to the U.S.,” Mr Wadhawan said at a press briefing. “Our steel and aluminium exports to the U.S. are very small. We are big exporters to the world, but the share of exports to the U.S. is small. So, the effect of this (capping exports) on our domestic industry will be minimal.”

The Secretary also said that India was not as badly affected by the U.S. not granting it eligibility under the generalised system of preferences (GSP), which would allow duty-free entry of 1,937 products from India to the U.S.

The U.S. has made several requests relating to market access in India, in exchange for GSP eligibility, including India not extending price caps on medical devices and allow firms to withdraw products from the market if they do not choose to sell at government-determined rates.

Exporters’ objection

Exporters in India have reportedly raised their voices against the GSP ineligibility saying that the U.S. is instead turning to other countries that are eligible for GSP. Mr Wadhawan, however, downplayed these concerns.

“India has graduated out of the GSP system,” Mr Wadhawan said.

“However, businesses in India have been pragmatic by investing in other countries that do still have GSP benefits and are taking advantage of this from those countries. The India-U.S. relationship is very thriving, deep and broad-based. In any relationship such as this, there are bound to be issues.”

The Commerce Secretary went on to highlight the “very remarkable” performance of exports over the last 2-3 years in the face of global challenges.

In 2016-17, exports grew by 7.28% in rupee terms and about 5% in dollar terms, he said. In 2017-18, exports grew by 10% in dollar terms, and in April to August in this financial year, exports grew 22.44% in rupee terms and above 16% in dollar terms, he added.

“Dollar values are important for maintaining the external balances, and the rupee figures are important for the exporters who receive their payments in rupees,” Mr Wadhawan explained.

 

 

Related Stories