With the US being one of the few countries that India runs a huge trade surplus with, the trade policy agenda for 2017 unveiled by the US, is worrisome. The report raising concerns on India’s export subsidy programmes and import restricting measures, could mean a bumpy ride for India’s trade with the US. India’s exports to the US stood at $40.3 billion in 2015-16, 15.3 per cent of India’s total exports. US ranks number one among India’s export destinations. In the current fiscal (April-Dec), India’s export to the US stood at $31.5 billion.

Imports into India from the US stood at $21.7 billion in 2015-16 and $16.1 billion during the April-Dec period this fiscal. After China, US ranks second among countries exporting to India. India’s imports from the US form about 5.8 per cent of India’s total imports.

India ran a trade surplus of $18 billion (2015-16) with the US, which could shrink if US trade policies start to hurt.

Export subsidies

The 2017 trade policy report specifically states that the United States will continue to seek to engage India bilaterally to commit to a phase-out of its export subsidy programmes to the extent that they benefit the textile and apparel sector.

Textiles, apparel and clothing ranks second after pearls and stones in the list of items that are exported to the US. In 2015-16, India’s exports of textile articles, apparel and clothing accessories, to the US stood at around $ 6.1 billion, 15 per cent of India’s total exports. Pearls and stones exports were at $8.6 billion, 21.5 per cent of total India’s exports to the US, while exports of pharmaceutical products totalled $ 5 billion, 12.5 per cent of exports.

For the current fiscal (April-December), India’s textile and apparel exports are about $4.4 billion to the US.

Nuclear reactors, boilers, mineral fuels are some of the other leading exports of India to the US.

Import restrictions

The report also highlights concerns in the Committee regarding India’s decision to impose import tariffs on certain telecommunication products covered under the Information Technology Agreement (ITA), as well as India’s tariff increases in a number of sectors that impact US exports to India.

Nuclear reactors, boiler, machinery tops the list of India’s imports from the US. These imports totalled $ 3.8 billion in 2015-16, forming 17.7 per cent total imports into India from the US. Pearls and stones imports amounting to $ 3.1 billion formed 14.4 per cent of India’s imports in 2015-16.

For the current fiscal (Apr-Dec), India’s import of nuclear reactors, boiler, machinery from US stood at $ 2.3 billion.

Aircraft, spacecraft, optical, photographic, cinematographic measuring tools, electrical machinery and mineral fuels, are the other leading items of imports into India from the US.

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