In News: With the re-appearance of Indian mangoes in the U.S. market, after the November 2021 U.S. India Trade Policy Forum (TPF) helped overcome a pandemic-induced hiatus in mango trade
- For the U.S., exporting ethanol and an associated animal feed ingredient, called DDGS (Distillers’ Dried Grains with Solubles) to India, is important, in the agricultural goods category
Areas of concern
- For India the export of carabeef (water buffalo meat) to the U.S., as well as table grapes, resumption of Indian wild caught shrimp exports are among the agricultural trade priorities currently under discussion
- The Indian side is keen on finalizing a Social Services Totalisation agreement – i.e., an agreement that will permit Indians temporarily working in the U.S. to reclaim what they pay into the U.S. system.
- India also wants to be reinstated as a beneficiary of the U.S.’s preferential market access program – the Generalized System of Preferences (GSP).
- On the U.S. side, greater access to the Indian market for medical devices, as well as digital trade, remain priorities
India-U.S Trade Policy Forum
- The Trade Policy Forum (TPF), a premier forum to resolve trade and investment issues between India and the United States
- The TPF was established in July 2005 to discuss about trade and investment issues.
The objective of the forum is to
- Facilitate trade and investment flows between the two countries
- Develop and implement trade policies through transparent procedures that comply with international obligations
- Foster a conducive environment for technological collaboration and innovation
- Promote inclusive economic growth and job creation in India and the US.
- The Minister of Commerce and Industry for India and the United States Trade Representative of the USA are the co-chairs of the Trade Policy Forum.
The India-US Trade Policy Forum has five focus groups.
- Innovation and Creativity (intellectual property rights)
- Tariff and Non-tariff barriers
Distillers’ Dried Grains with Solubles
- Distillers’ dried grain with solubles (DDGS) is a byproduct of bioethanol fermentation, which uses the dry milling technology for starch-rich grains such as corn, wheat, and barley.
- Since DDGS is rich in crude protein, fat, fiber, vitamins, and minerals, it is currently used as aquaculture, livestock, and poultry feeds
- This high-protein feed can replace maize and soyameal in poultry feed by 50 per cent and 60 per cent respectively.
- In recent years, DDGS has been used as feedstock in the production of value-added products via microbial fermentation
Generalized System of Preferences (GSP)
What is a Generalized System of Preference (GSP)?
- It is a preferential agreement that allows concessional low / zero tariff imports to developed countries from developing countries.
- It involves reduced/zero tariffs of eligible products exported by beneficiary countries to the markets of GSP providing countries.
Global level GSP:
- Over the years, GSP, founded in 1971 under the auspices of UNCTAD, has helped to create an enabling trading climate for developing countries.
- GSP preferences are given by the following 13 countries: Australia, Belarus, Canada, the European Union, Iceland, Japan, Kazakhstan, New Zealand, Norway, Switzerland, the Russian Federation, Turkey and the United States of America.
- Following the WTO Hong Kong Ministerial Decision of UNCTAD in 2005 the members agreed that developed countries and developing countries in a position to do so would grant duty-free and quota-free market access for exports of Least Developed Countries (LDC).
Under the GSP, who are the beneficiaries?
- About 120 developing countries are the beneficiaries of the GSP. In terms of export volume realized under GSP, India and Brazil were the major beneficiaries.
India was taken out of the GSP program by US in June 2019
About $5.6 billion of Indian exports to the U.S. were covered by the program, although the tax savings for these products amounted to less – about $ 190 million.
Previous Year Questions (PYQs)
Q.1) Consider the following statements: (2020)
- The value of Indo-Sri Lanka trade has consistently increased in the last decade.
- “Textile and textile articles” constitute an important item of trade between India and Bangladesh.
- In the last five years, Nepal has been the largest trading partner of India in South Asia.
Which of the statements given above is/are correct?
- 1 and 2 only
- 2 only
- 3 only
- 1, 2 and 3
Source: The Hindu