“Mr Trump says India has a higher trade surplus, initially he said $100 billion and since India is not accepting enough US goods and services … that is why India has to give more access, non-reciprocal access to US goods in the FTA.”
This is basically a pressure tactic against India, says Ajay Srivastava, formerly of the India Trade Service and currently head of the GTRI (Global Trade Research Initiative) think tank. Giving his view on the India-US negotiaton on The Gist, he underscored that the two countries have a very diverse, deep and rich relationship and when one analyses the trade relationship, the deficit is not $100 billion but around $45 billion.
“Now here’s the catch,” Srivastava said, “in areas like education, or the earnings of digital giants like Amazon, Google or Microsoft … we are paying for each of them … when we add up, it works out to $85 billion and the US ends with a surplus of $35 to $40 billion.”
In estimates GTRI has researched and prepared, Indian students in US universities pay about $15 billion in tuition fees every year. Add to that at least $10 billion in living expenses, which adds up to a tidy $25 billion.
Meaning, the US earns so much annually through education alone. But these figures don’t get reflected in the trade statistics. So also the earnings of Citibank, which processes a substantial part of India’s trade.
The profits of US digital majors operating in India are repatriated to their home country and again don’t show up on the bilateral trade figures.
“We should be looking at the entire India US relationship,” argues Srivastava, “rather than just the merchandise trade but the US is not only pressurising us to cut tariffs one way, they are also pressurising us to dilute our domestic policies.”
They want more openings for Amazon, no data protection laws in India so as to help Google, they don’t like India’s MSP for wheat and rice and are also opposed to the public stock-holding system.
Tune in for more in this conversation on The Gist with Ajay Srivastava, head of the Global Trade Research Initiative.
