India and the US are close to settling seven trade disputes out of court

“There are seven disputes between India and the US at the WTO. Talks about an out-of-court settlement are well advanced. So after we reached an agreement, we could go to the Dispute Resolution Body and mutually agree to take the cases back. For example, the US could agree to withdraw three cases against India and India would do the same,” the person said on condition of anonymity.

The settlement talks are gaining momentum as they also include the dispute over a hefty tariff of 25% on Indian steel and 10% on aluminum exports imposed by former US President Donald Trump in 2018, sparking trade tensions between the two countries.

Another dispute between the two nations concerned India’s export subsidy schemes, such as the Merchandise Exports from India Scheme (MEIS), the Export Oriented Units Scheme and sector-specific schemes including the Electronics Hardware Technology Park Scheme, Special Economic Zones and Export Promotion Capital Scheme.

The US claimed in its complaint that these “apparent export subsidies” offer Indian exporters financial advantages and allow them to sell goods cheaply to the detriment of American workers and manufacturers, in violation of WTO norms banning subsidies that distort world trade.

An out-of-court settlement is under discussion as the WTO’s top court, the Dispute Settlement Body, remains dysfunctional with the US blocking the appointment of judges. According to the WTO, the US has systemic concerns about the Court of Appeal.

“The US said it believes WTO members must undertake fundamental reforms if the dispute settlement system is to remain viable and credible. The US said the dispute settlement system can and should better support the WTO’s negotiating and monitoring functions, adding that it looks forward to further discussions with members on these important issues,” read a summary of the issue at the WTO site.

US-India relations are on the upswing amid a shifting geopolitical landscape. Both nations share growing unease about China’s increasing military strength and aggressive behavior in the Indo-Pacific region. Beyond security concerns and shared democratic values, the two countries are also actively diversifying economic ties to reduce dependence on China and mitigate supply chain risks.

Both countries are also committed to the Indo-Pacific Economic Framework for Prosperity (IPEF) to build supply chain resilience with trusted partners.

Mint has reported that the US would help India develop standards for goods and services and train workers in sectors of strategic interest such as semiconductor manufacturing.

Prime Minister Narendra Modi’s visit to the United States begins June 21 in New York, where he will lead celebrations of International Yoga Day at the UN headquarters, according to the State Department.

Inquiries to the Department of Commerce, the State Department, the Prime Minister’s Office and the US Embassy in India went unanswered.

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