Taken aback by the US’ imposition of penal duties on certain Indian exports as action against the popular Remission of Duties and Taxes on Exported Produts (RoDTEP) scheme, India wants to set up a dialogue mechanism between the trade remedy bodies of the two countries for better understanding of perspectives, officials said.
The matter is likely to be taken up at the meeting between US Trade Representative Katherine Tai and Commerce Minister Piyush Goyal later this week, in addition to other significant issues, such as addressing non-tariff barriers, reinstating Generalised System of Preferences (GSP) benefits and finalising a bilateral totalisation/social security agreement, an official tracking the matter told businessline.
Meeting with Goyal
The USTR, who is visiting India on January 12-14, will hold a bilateral meeting and co-chair the 14th Trade Policy Forum meeting with Goyal and also interact with industry representatives.
“The USTR’s visit gives India an opportunity to take up all issues of concern. It is being hoped that in the bilateral meeting as well as the TPF priority areas identified by both sides will be satisfactorily discussed,” the official said.
Countervailing duties
Discussion on the countervailing (anti-subsidy) duties imposed by the US on three items exported from India as action against the RoDTEP scheme will be important as the scheme was especially designed to be compliant with WTO norms.
The RoDTEP scheme, announced in January 2021, refunds embedded duties and taxes, such as VAT on fuel used in transportation, mandi tax and duty on electricity used during manufacturing of the exported items. It replaced the WTO-incompatible MEIS scheme, which was not transparently determined and had faced several challenges from partner countries.
“There should be a dialogue mechanism between the trade remedies bodies to understand each other better. Ultimately it is a sovereign right of a country to impose trade remedies such as anti-dumping duty or countervailing duty. But there should be more consultations to make the other side better understand a certain scheme or policy measure,” the official explained.
During an investigation, the industry may find it difficult to explain a measure as it may not have access to the relevant data base, but the government would, the official added.
Data on non-tariff barriers
The Commerce Ministry has also collected data on non-tariff barriers faced by various sectors, including agriculture, in the US market so that the issue can be addressed at the TPF meeting, the official said.
Restoring the GSP benefits, that were withdrawn by the Trump government in 2019, may also be taken up at the meeting although the USTR had earlier said that the matter would be considered per the eligibility criteria fixed by the US Congress.
The long-proposed social security pact or totalisation agreement, that could lead to an annual saving of up to $4 billion by Indian companies in the US, is likely to yet again feature in India’s agenda.
Fast-tracking issuance of visas for skilled workers is another area which India is likely to bring up.
The US was India’s biggest trading partner in 2022-23 with bilateral trade increasing 7.65 per cent (year-on-year) to $128.55 in 2022-23, per government data. Exports to the US increased 2.81 per cent to $78.31 billion during the fiscal, while imports grew by 16 per cent to $50.24 billion.