With US President Donald Trump firing the first shot by notifying Congress of his intention to end the favourable treatment India as enjoyed under the Generalised System of Preferences (GSP), India needs to work on its global competitiveness, expedite economic reforms if it is eyeing markets abroad for its produces. America has targeted India’s trade protectionist policies whereas India’s commitment to a rule-based multilateral trading system, based on the principles of inclusiveness and consensus remains in place intact. The interest conflict point is that United States of America wants India to cut its high tariff so that US manufacturers get access to the Indian market, which today is predominantly dominated by China. Even US President Donald Trump targeted India’s trade protectionist policies and lamented that in India some of the tariffs are 100 per cent and the US charged nothing. If the stalemate continues the fears of a global trade war looks to become truer because of the varying tariff regime present. Even if India only responds to the US actions, thereby levying a tariff on the US imports, Indian exports will be affected more and this will damage India’s economy severely. India needs to aggressively pursue a bilateral trade with its other trading partners, China, European Union and the United Kingdom. India and China could work for improved economic ties and minimise the collateral damage created by President Trump’s ‘America First’ policies. India mostly exports raw materials to China while China dumps cheap and subsidised goods in the Indian market. These differences need to be sorted out if Indian exports are to remain healthy.
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