U.S., India keen to wrap up trade deal

News:United States and India are working on ways to resolve long-disputed trade issues to sign a trade deal.


Issues between India and US:

Trade imbalance:

  • India’s exports to the U.S. in 2017-18 stood at $47.9 billion while imports were at $26.7 billion.The trade balance is in favour of India.


  • The bilateral tensions have increased over each side’s tariff policies.
  • India has imposed long pending retaliatory tariffs on US products after the US had imposed 25% steel and 10% aluminum tariffs.

Generalized system of preferences(GSP):

  • USA has terminated India’s designation as a beneficiary developing country under the Generalized System of Preferences (GSP) programme.

Data localisation rules:

  • The United States has been asking India to withdraw the Data localisation rules.
  • In April 2018,Reserve Bank of India(RBI) had asked payment firms to ensure their data are stored exclusively on local servers.This has affected US firms such as Mastercard and Visa.

E-commerce rules:

  • US concerns regarding India’s e-commerce rules which had imposed restrictions on how e-commerce platforms such as Amazon and Walmart owned Flipkart conduct business.

Additional information:

Generalized System of Preferences (GSP): 

  • GSP is a preferential tariff system extended by developed countries to developing countries. 
  • It is a preferential arrangement in the sense that it allows concessional low/zero tariff imports from developing countries.
  • The countries like the United States and United Kingdom as well as the European Union give GSPs to imports from developing countries. 
  • The objective of GSP is to give development support to poor countries by promoting exports from them into the developed countries.

About Data localisation:

  • Data localisation is the act of storing data on any device physically present within the borders of a country.
  • Localisation mandates that companies collecting critical data about consumers must store and process them within the borders of the country.
  • The main intent behind data localisation is to protect the personal and financial information of the country’s citizens and residents from foreign surveillance and give local governments and regulators the jurisdiction to call for the data when required.