Prelims Level
Mains Level
Prelims Syllabus : Mains Syllabus :

Trade Deficit:

  • India being one of the country with which US has a large trade deficit of around $2 billion.
  • US now singles out India and want to increase the import of oil and shale gas and other energy resources from it.

Indian side

  • India sends more of its STEM workers to US and students opt to study in US.
  • This in turn being an investment in the US economy which India tries to recognise it and Indian STEM workers have been contributing to the US economy.
  • US service sector wants the H1B visa norms to be eased so that Indian workers and others can be easily recruited.
  • This policy is indeed a contrary to the Trump administration of America’s first’ approach.

Imports and Export

  • The US is India’s second largest trading partner and India is the 9th largest trading partner.
  • Major items imported from India include IT services, textiles, machinery, gems and raw diamond, chemical’s, iron and steel products.
  • The Trump administration has increased the duty of aluminium and Iron and steel to 10% and 20% from the countries like India and China.

India’s Stance

  • India is not in favour of the retaliatory tariff or going to WTO.
  • Instead India wants to resolve the issue bilaterally to engage with US and 2 plus 2 dialogue is one such platform.
  • Import of oil from Iran is the bone of contention with UN sanctions hitting imports this year , Iran being geographically closer to India and Iran oil is much more cheaper.
  • India does not want US to dictate policies for her priority for which India should explore more diplomatic platform to address this issue.
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