Focus: GS-III Indian Economy, GS-II International Relations
Why in news?
India and the U.S. have “almost” finalised a limited trade deal, Commerce Minister said.
- Commerce Minister also reiterated what both countries have declared earlier — that the longer-term plan is to work towards a comprehensive trade deal.
- As an intermediate step between the imminent limited deal and the comprehensive deal, Commerce Minister proposed a preferential trade agreement with the United States that would cover 50 to 100 goods and services.
- The Commerce Minister is of the view that India should also look at an early harvest in the form of a preferential trade agreement so that India could look at an early harvest of maybe 50 or 100 products and services, rather than waiting for the gains of a Free Trade Agreement (which may take several years to conclude).
India wanted the U.S. to restore its access to the U.S. preferential trading system, the Generalized System of Preferences (GSP), an end to Mr. Trump’s steel and aluminium tariffs, increased market access for some categories of Indian agricultural products and so forth.
U.S. concerns during the negotiations have included market access for American dairy and agricultural products, medical devices and a cut in information and communication technology (ICT) import tariffs. The U.S. has also had concerns with India’s digital trade policies (for instance FDI in commerce, data localisation).
In other news: US open to talks on security tax burden on Indian professionals
- The US has finally agreed to discuss with India differences over a social security tax levied on Indian professionals employed in America – the first step towards reaching an agreement that could allow Indians working in the US to be repaid social security deposits when their work visas expire.
- According to an industry estimate, Indians working in the US forfeit almost $1 billion annually in social security tax.
- For the first time in almost a decade, the US recently acknowledged that social security tax is a bilateral issue and agreed to discuss it.
- Indian workers, particularly information technology (IT) professionals, make social security contributions in the US when they work there, but most of them come back home before they are eligible to withdraw money from their social security contributions.
-Source: Hindustan Times, The Hindu