'Make in India' campaign and US-India trade relationship

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  'Make in India' campaign and US-India trade relationship

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• The crux: In its 2021 Trade Policy Agenda and 2020 Annual Report, the US Trade Representative (USTR) said that during 2020, the US continued its engagement with India to try to resolve longstanding market access impediments affecting US exporters. 
• New government in place: The Biden administration has told the US Congress that India's recent emphasis on import substitution through the 'Make in India' campaign has "epitomised" the challenges facing the bilateral trade relationship. The USTR said that while India's large market, economic growth, and progress towards development make it an essential market for many US exporters, a consistent trend of trade-restrictive policies has inhibited the potential of the bilateral trade relationship. It is basically imports substitution.
• Trump's GSP termination: Effective June 5, 2019, the US had terminated India's eligibility under the Generalized System of Preferences (GSP) programme, following a review of concerns related to India's compliance with the GSP market access criterion. After that, the US and India resumed intensive work in the fall of 2019 aimed at producing a package of meaningful market access outcomes, and this engagement continued throughout 2020. The objectives of the US in this negotiation included resolution of various non-tariff barriers, targeted reduction of certain Indian tariffs, and other market access improvements, it said.
• Year 2020: The United States also engaged with India on an ongoing basis throughout 2020 in response to specific concerns affecting the full range of pressing bilateral trade issues, including intellectual property (IP) protection and enforcement, policy development affecting electronic commerce and digital trade, and market access for agricultural and non-agricultural goods and services.

1. According to the report, while the United Kingdom remained the largest supplier of services, accounting for USD 62.3 billion of total US services imports in 2019, India was the sixth largest with USD 29.7 billion after Canada (USD 38.6 billion), Japan (USD 35.8 billion), Germany (USD 34.9 billion) and Mexico (USD 29.8 billion).
2. The USTR said that in July 2020, in response to outreach by it, India released US shipments of lactose and whey protein concentrate (WPC) that had been blocked since April 2020 when India began enforcing a requirement that those products be accompanied by a dairy certificate.
3. Prior to this shift in practice, US exports of lactose and WPC to India had grown steadily for years, reaching a high of approximately USD 54 million in 2019 before falling to approximately USD 32 million in 2020.

• India's Atmanirbhar Bharat: The self-reliant India campaign (Atmanirbhar Bharat) launched in response to the pandemic in 2020 has gained pace in India. While the government claims it is not about imports-substitution, but trade partners like the US feel it may not be so.

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