As per a Congressional report, US-India tensions are on the rise over
each side’s tariff policies under the Trump administration, PTI reported. The
two sides have engaged in negotiations to address these trade frictions.

The bipartisan Congressional Research Service (CRS) pointed out that
India’s recent tariff hikes on cell phones and other telecommunication goods
went up from zero per cent to 15-20 per cent in the last few years.

“Under the Trump administration, bilateral tensions increased over
each side’s tariff policies. In general, India has relatively high average
tariff rates, especially in agriculture. It can raise its applied rates to
bound rates without violating its commitments under the WTO (World Trade
Organization), causing uncertainty for US exporters,” said the CRS report,
which is prepared for the members of Congress ahead of trade decisions.

The United States have decided to take up this issue with World Trade Organisation (WTO) dispute
consultations against India, also questioning its compliance with the WTO
Information Technology Agreement (ITA).

“India opposes the 25 per cent steel and 10 per cent aluminum
national security-based ‘Section 232’ tariffs that the Trump Administration
imposed in 2018. India repeatedly delayed applying planned retaliatory tariffs
against the United States in hopes of resolving the issues bilaterally,”
it said.

After India was not accepted for the US Trade Preference Program, India
imposed higher tariffs of 10 per cent to 25 per cent. This had a major impact
on USD $1.32 billion of US exports. India and US are challenging each other’s
tariffs in the WTO.

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“Under the Trump administration, the United States and India held
concerted negotiations to address trade frictions. A potential trade deal could
include partial restoration by the United States of India’s GSP (Generalised
System of Preference) benefits in exchange for certain market access
commitments according to press accounts,” CRS said.

CRS will be looking into a set of key issues, including what aspects of
bilateral trade relations would change under President-elect Joe Biden-led administration.