India and the United States will re-launch the Trade Policy Forum (TPF), a premier forum to resolve trade and investment issues between the two countries, after four long years.
GS-II: International Relations (Foreign Policies affecting India’s Interests)
Dimensions of the Article:
- U.S.-India relations
- About India-U.S. Trade Policy Forum (TPF)
- Way forward
About India-U.S. Trade Policy Forum (TPF)
- The Trade Policy Forum (TPF) between the United States and India has decided to forge an agreement to facilitate U.S. market access from India, and reciprocate with similar access in the Indian market to many agriculture and animal products.
- India has sought restoration of the GSP (Generalized System of Preferences) benefits by the U.S.
- The Forum also agreed on the significance of negotiating a Social Security Totalization Agreement in the interest of workers from both sides. A Totalization Agreement is a convention between two countries preventing duplicate social security contributions for the same income.
- India and the U.S. also discussed engagement in various multilateral trade bodies including the World Trade Organisation (WTO) and the G20 for achieving a shared vision of a transparent, rules-based global trading system among market economies and democracies. The Forum also decided to find mutually agreed solutions on outstanding WTO disputes between the two countries.
- The U.S. indicated an interest in supplying ethanol to India for its goal of 20% ethanol blending with petrol by 2025.
- The two sides decided to partner with allies in developing a secure pharmaceutical manufacturing base and de-risk global supply chains in such critical sectors like health.
- The Forum discussed ways in which legal, nursing and accountancy services can facilitate growth in trade and investment, and sought to work together on electronic payment services and the digital economy.
- Both countries recognise the importance of critical and emerging technologies like cyberspace, semiconductors, Artificial Intelligence, 5G, and future generation telecommunications technology.
- Both countries exchanged views on approaches to increase the utilization of renewable energy to achieve net-zero emissions, as agreed in the India – US Climate and Clean Energy Agenda 2030 Partnership.
- A deal with the US will be beneficial for India, both strategically and economically.
- The first step towards a potential deal is for India to take the initiative and consider unilaterally removing its retaliatory tariffs. This will represent India as willing to be a constructive player in trade talks.
- From a strategic point of view, one of the ways that India can counter China is through deepening trade ties with partners who are committed to supporting India’s growth.
- It’s important that on the digital services tax, India accords with emerging global agreements that will accelerate trade.
- Even though removing the tariffs without a commitment from the US is a leap of faith, it ultimately will be beneficial for the bilateral trade relationship.
-Source: Hindustan Times