New Delhi: Amidst the tensions between India and Pakistan and India's Balakot air strikes subsequent to the attack on the CRPF convoy in Pulwama, a major development happened in the economic sphere which went almost unnoticed.
The United States of America gave a notice to withdraw zero duty entry for Indian exports under its GSP (Generalized Scheme of Preferences). The move if it happens is expected to affect around 5.7 billion dollars of Indian exports. ETV Bharat spoke to Economist Akash Jindal on the issue.
He was of the opinion that if this move initiates trade war between India and US, then US too would be adversely affected by it. "India is the biggest consumption market for the United States and we have over the years allowed the multinational corporations in India specially in the fast food sector. The United States should remember all of that and they should also remember the fact that the FMCG companies have also been allowed to operate in India with ease."
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While the commerce ministry has tried to play down the issue suggesting that even if the tariffs are imposed, they would be as low as 4%. However one needs to keep in mind that a lot of Indian exports which are labour intensive in nature are working on a profit as low as 2%.
Jindal however was quick to point out that " many of the things that we produce and export to US is used by them as raw materials and therefore if they increase the tariffs, their own products will become costlier as well. In this matter only India cannot be blamed, the US too should have kept in their mind that India has always played a good friend to them and the relationship that goes beyond trading between the two countries could be impacted as well if a trade war is initiated between the two countries."
Further speaking on the issue of a possible trade war between the two countries, Jindal added " the United States in the past has got into a trade war with China and it did not end very well for them. It is for them to decide if they want to get into a similar skirmish with India. The worst scenario for India is that we have to pick up alternate markets like the Europe".
