How Will the Resolution of Trade Disputes between India and the US Impact Bilateral Commerce and Economic Relations?

India and the United States have reached an agreement to end six trade disputes at the World Trade Organisation (WTO), a decision that experts believe will boost bilateral commerce and enhance economic relations between the two countries. The move comes as Prime Minister Narendra Modi undertakes a state visit to the US at the invitation of President Joe Biden and First Lady Jill Biden. The resolution of these disputes is seen as a positive step towards promoting trade between India and the US.

Boosting Bilateral Trade through Resolution Mechanisms

Trade experts and international trade expert Biswajit Dhar have welcomed the decision, emphasizing the need for a strong and effective mechanism to resolve trade-related issues between India and the US. They believe establishing such a mechanism will prevent future trade disputes and allow for bilateral resolution through mutually agreed solutions. By avoiding the need to file complaints with the WTO, the two nations can foster a more direct and efficient trade relationship.

Positive Impact on Indian Exports and 2+2 Dialogue

The announcement has also been met with enthusiasm from the Federation of Indian Export Organisations (FIEO), whose Director General Ajay Sahai told PTI that it will boost India's exports to the US. Removing retaliatory customs duties on American products such as almonds, walnuts, and apples will positively impact India's trade with its largest trading partner, the US. Additionally, experts anticipate that resolving these trade disputes will strengthen the 2+2 dialogue between India and the US, further promoting trade and cooperation.

Overview of the Resolved Trade Disputes

The six disputes resolved between India and the US include three initiated by each country. These disputes involve countervailing measures on specific steel products, measures related to solar cells and modules, export-related measures, certain measures on steel and aluminum products, and additional duties on certain US products. Trade experts suggest that the resolution of these disputes will be communicated to the WTO based in Geneva, in accordance with mutually agreed terms.

The trade disputes date back to 2018 when the US imposed import duties on certain steel and aluminum products, citing national security concerns. In response, India imposed customs duties on 28 American products, triggering a complaint filed by India against the US at the WTO. Over the years, both countries initiated disputes against each other on various trade-related issues. The resolution of these disputes signifies a step towards resolving the conflicts and strengthening trade ties.

The timeline of these disputes is as follows:

--- On April 12, 2012, India requested consultations with the United States regarding the imposition of countervailing duties on certain hot-rolled carbon steel flat products from India.

--- On February 6, 2013, the US requested consultations with India concerning certain measures of India relating to domestic content requirements under the Jawaharlal Nehru National Solar Mission for solar cells and solar modules.

--- On September 9, 2016, India requested consultations with the US regarding certain measures of the US relating to domestic content requirements and subsidies in the energy sector.

On March 14, 2018, the US asked for consultations with India concerning certain alleged export subsidy measures of India under various schemes.

--- On May 18, 2018, India requested consultations with the US concerning certain measures imposed by the US to adjust imports of steel and aluminum into the US.

--- On July 3, 2019, the US asked for consultations under the WTO dispute settlement mechanism with India regarding India's imposition of additional duties on certain US products.

Under WTO rules, member countries can file a case with the WTO if they believe a trade measure violates the organization's norms. Bilateral consultation is the initial step in resolving a dispute, and if a resolution is not reached, either party can approach the establishment of a dispute settlement panel. The panel's ruling can be challenged at the WTO's appellate body. However, the functioning of the appellate body has been hindered due to differences among member countries regarding the appointment of its members.