US Commerce Secretary Wilbur Ross warned India on Tuesday, 7 May, that any retaliatory tariff imposed by India in response to the United States’ plan to withdraw trade privileges would not be “appropriate” under World Trade Organisation (WTO) rules, Reuters reported.
The comment came at a time when India’s trade ties with US, its second-biggest trade partner after China have been worsening.
Ross added that India’s new e-commerce rules would hurt future US investments in the country, but said he hoped that US firms would win defence deals.
In March 2019, US President Donald Trump had announced a plan to end the system of Generalised System of Preferences (GSP) for India. India is the biggest beneficiary of the GSP. Following this development, Indian officials have posed the possibility of raising import duties on more than 20 US goods if Trump’s plan is brought to fruition, the Reuters report said.
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A Limit to Discriminatory Behaviour
“Any time a government makes a decision adverse to another one, you will have to anticipate there could be consequences,” Ross said. “We don’t believe under the WTO rules that retaliation by India would be appropriate,” Reuters quoted Ross.
Ross added that if India dealt with some issues raised by the US, there was a possibility that the decision to end GSP could be reversed.
American companies were showing goodwill to India’s ‘Make in India’ programme, Ross said, pointing out that despite this, India’s new e-commerce rules were discriminatory towards US firms such as Walmart Inc and Mastercard Inc.
“But there’s a limit to how far the discriminatory behavior can go. And our job is to try to get a level, more level playing field,” Ross said, according to the report.
Earlier, Ross had said at a business conference that after the elections, India was committed to deal with issues such as price caps and localisation rules which were a barrier to trade with the US.
“As President Trump has said, trade relationships should be based, and must be based, on fairness and reciprocity,” Ross added. “But currently, U.S. businesses face significant market access barriers in India.”
Ross also clarified that India would remain in a preferential position with regard to H1B visas irrespective of the outcome of any discussion on immigration.
(With inputs from Reuters.)
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