India has so far been able to successfully preserve its favorable bilateral ties with both countries while prioritising its own interests, despite the obvious tensions between the USA and Russia. (Answer in 250 words)
Answer: The office of the United States Trade Representative (USTR) maintains a list of countries that it classifies as developing, developed and least-developed. Countries that are classified as developing are allowed to export certain goods to the US without punitive tariffs that are usually imposRead more
Answer: The office of the United States Trade Representative (USTR) maintains a list of countries that it classifies as developing, developed and least-developed. Countries that are classified as developing are allowed to export certain goods to the US without punitive tariffs that are usually imposed on goods from developed countries. The ‘developing country status’ owes its origin to the US Trade Act of 1974, which authorized the Generalized System of Preferences (GSP) to help poor countries develop faster. These benefits were extended further under the WTO wherein rich countries agreed to grant trade benefits to countries that classified themselves as poor. About two-thirds of countries that are members of the WTO classify themselves as developing countries and avail benefits. Recently, the US removed more than a dozen countries including India, from its list of developing countries. The US administration has repeatedly accused fast growing economies like India and China of wrongly claiming trade benefits and wants to make these deals fairer to the interests of the US. Implications of this action are as follows:
- Higher tariffs: India has been one of the largest beneficiaries under the GSP with tariff exemptions amounting to $260 million in 2018. Now the Indian goods will have to face higher tariffs as compared to other developing countries which will negatively impact the exports of goods to the US and will hamper India’s export potential.
- Loss of exemptions: India was eligible for the 2 percent de-minimis standard under WTO rules, which exempted India from countervailing duty (CVD) investigation. Duty investigations for India will now be conducted. It would be easier for the US to penalize the country if it harms US industries with unfairly subsidized exports.
- Access to global market: Many other developed nations give India the GSP which might also be under consideration that would impact India’s market access globally and decrease its export competitiveness.
- Impact on agriculture: Due to WTO, India gets more subsidies than developed countries, and this includes agricultural subsidies. If it is designated as a developed country, these subsidies will be halved, if not more. It will have serious implications on agriculture and the farming community.
India is a unique economy wherein, a small part of the country seems like a developed country, but a large part of the nation is less developed or even under-developed. At the current stage of development, any attack on India’s status as a developing country will have a serious impact on its overall development. India needs to rebalance things and bring the USA on the negotiation table to turn things in its favour.
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Answer: Presently, USA-Russia relationship stands apart largely due to differences over issues such as nuclear disarmament, Iran crisis, Ukrainian crisis, Afghan fiasco, geopolitics of the Indo-Pacific and climate negotiation. These differences are promoting strategic apprehension from both the sideRead more
Answer: Presently, USA-Russia relationship stands apart largely due to differences over issues such as nuclear disarmament, Iran crisis, Ukrainian crisis, Afghan fiasco, geopolitics of the Indo-Pacific and climate negotiation. These differences are promoting strategic apprehension from both the sides and contributing to the ongoing strategic impasse. India has good relations with both Russia and the US and siding with one of these countries could cost India its relationship with the other. However, that has not been the case so far as India seems to have taken a neutral approach and has maintained its relationship with Russia and the US independent of each other by not letting either of them dictate its foreign policy, as witnessed recently: India’s relations with Russia:
India’s relations with USA:
Both the USA and Russia as veto-wielding powers in the United Nations support India’s bid for a permanent seat in the UN Security Council as well as support India’s entry into the Nuclear Suppliers Group. Since a permanent seat in the UNSC and NSG membership are seen as pivotal to India’s aspirations of projecting itself as a major global power, a strategic relationship with the USA and Russia becomes even more paramount. India has successfully maintained ties with its major strategic partners, and is making its own foreign policy decisions irrespective of the stance of Russia or the USA.
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