India and the US have resolved six of the total 7 disputes at the WTO bilaterally during the Indo-US state visit, Commerce Minister Piyush Goyal said.
Goyal said that India and the US have actively engaged in discussions for the last two years to terminate these six outstanding disputes at the WTO.
These disputes have been filed by India and the US over a decade, representing certain key sectors of the economy such as steel, aluminium, renewable energy, solar products, and certain key export-related measures.
"This Mutually Agreed Solution (MAS) negotiated by both sides marks the culmination of protracted negotiations, and it is unprecedented in WTO history," the minister said addressing a press conference on June 23.
The resolution comes amid PM Modi's ongoing State visit to the US where he had bilateral meeting with the US President Joe Biden. Both the countries inked pacts across defence, space, technology and resolved to strengthen trade ties.
Moneycontrol had earlier reported that the resolution of the trade disputes could come during Modi's US visit.
The US and India have had a number of disagreements on trade in recent years, including a dispute over steep steel and aluminum tariffs imposed by the US in 2018.
In 2018, the US imposed 25 per cent and 10 per cent import duties on certain steel and aluminium products, respectively, on grounds of national security.
In retaliation, India in June 2019 imposed customs duties on 28 American products, including chickpeas, lentils, almonds, walnuts, apples, boric acid, and diagnostic reagents. India had also filed a complaint against the US in WTO on imposing these duties.
"The US has assured us that at least 70 percent of all such requests of steel, and 80 per cent of all such requests for aluminium applications for products originating in India will be excluded from the additional tarrifs," Goyal said.
It would provide significant impetus to raise India's Steel and Aluminium exports by about 35 percent, a press statement by the commerce ministry reads.
India and the US have now agreed to end six trade disputes at the World Trade Organization with New Delhi also removing retaliatory customs duties on certain American products such as almonds, walnuts, and apples.
Three of the six terminated trade disputes have been filed by India namely Certain Measures Relating to Solar Cells and Solar Modules; Export Related Measures and Additional Duties on Certain Products from the United States. While the other three disputes that have been filed by the US are Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products from India; Certain Measures Relating to the Renewable Energy Sector; and Certain Measures on Steel and Aluminium Products.
The one pending case is the poultry case where as per Goyal, both sides remain involved in discussions to find a solution by end of this year.
"And thus, India and the US by the end of this year will have no disputes. All the six major ones have anyway been dealt with," the minister said.
In 2015, India lost a long-pending dispute over poultry imports from the US at WTO's dispute settlement body. India had 12 months to comply with the WTO order. The US had sought trade sanctions against India in this case.
The development comes at a time when trade between the two countries has reached a record high and the US has emerged as India's biggest trading partner.
According to the provisional data of the Commerce Ministry, bilateral trade between India and the US has increased by 7.65 percent to $128.55 billion in 2022-23 against $119.5 billion in 2021-22. It was $80.51 billion in 2020-21.
Agreement to discuss GSP
The US had in 2019, withdrew India’s preferential tariff benefits under the Generalised System of Preferences (a US trade preference program which provides opportunities to specific countries to grow their trade).
After the current US-Indo meet, the two countries have also agreed to discuss New Delhi's demand for restoration of GSP benefits to domestic exporters.
"Now both sides will commence discussions to find a solution," Goyal said.
About 1,900 Indian products from sectors such as chemicals and engineering were getting duty-free access to the US market under the GSP, introduced in 1976.
The joint statement issued after the meeting of Prime Minister Narendra Modi and US President Joe Biden in Washington said that India has highlighted its interest in the restoration of its status under the US Generalized System of Preferences programme, which could be considered in relation to eligibility criteria determined by the US Congress.
Commerce Minister Goyal said that India and the US will now engage in a dialogue on the issue. However, the final decision on whether to restore India's GSP status will be made by the US Congress.
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