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 9^th 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.