India-US and India-EU Trade Relations
There are signs of improvement in the relationship between India and the United States. Despite previous criticisms, US President Donald Trump acknowledged ongoing negotiations aimed at addressing trade barriers between the two countries.
US Trade Negotiations
- A US trade delegation led by Brendan Lynch, Assistant US Trade Representative for South and Central Asia, is in India for discussions with government officials.
- However, a 50% tariff on Indian exports to the US continues to affect trade, with significant impacts such as the cancellation of 50% of shrimp orders from Andhra Pradesh.
India-EU Trade Talks
- Negotiations between India and the European Union are progressing positively, with confidence in concluding a deal by the year-end.
- Maros Sefcovic, EU’s Commissioner for Trade and Economic Security, emphasized the commitment to finalize negotiations.
Free Trade Agreements and Trade Barriers
India's efforts to sign free trade agreements should be complemented by broader trade liberalization, particularly in easing non-tariff barriers like Quality Control Orders (QCOs).
Quality Control Orders (QCOs)
- QCOs, aimed at ensuring quality and protecting consumers, often act as trade barriers and increase costs.
- As of March, 187 QCOs cover 769 products, including essential goods like water bottles, helmets, furniture, and stainless steel pipes.
Impact on Industry
- The Confederation of Indian Textile Industry and MSMEs have raised concerns about QCOs affecting competitiveness and increasing input costs.
- NITI Aayog Vice Chairperson Suman Bery described QCOs for inputs as a “malign intervention.”
- A high-level committee led by NITI Aayog member Rajiv Gauba is deliberating on non-financial regulatory reforms.
Global Supply Chain Integration
Lowering tariffs alone is insufficient for integrating with global supply chains. Companies seek transparent, predictable regimes. To enhance global integration and avoid non-tariff barriers, India should minimize imposing such barriers, allowing the market to determine quality.