US hopes India will have freer hand to pursue tough economic reforms

Vastavam web: The White House is hopeful that Narendra Modi in his second term as prime minister with a strong mandate will have a freer hand to pursue some of the tough economic reforms that will help create a more business-friendly environment, a senior official has said. His comments came as the US media on Friday reported that India could soon become the next target of President Donald Trump’s aggressive policy, including launching the so-called Section 301 investigation against India.

“There’s concern that recent restrictions adopted by the Indian government on e-commerce and data localisation have negatively impacted US companies and the overall investment climate,” a senior White House official told on condition of anonymity. “The United States is hopeful that, with the election over, Prime Minister Modi will have a freer hand to pursue some of the tough economic reforms that will help create a more business-friendly environment and encourage new foreign investment,” the official said.

Trump, who looks at every bilateral relationship from the prism of economy, has for about a year now publicly expressed his displeasure over the status of India-US economic relationship in particular the alleged high tariffs by India. In the past several months, he has called India a “tariff king” and threatened to impose reciprocal tariffs on Indian products as well.

Immediately after Modi was sworn in for second term, President Trump informed the US Congress of his decision to terminated India’s designation as a beneficiary developing nation under the key GSP trade programme after determining that it has not assured the US that it will provide “equitable and reasonable access to its markets.” The Generalised System of Preference (GSP) is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.

“India remains one of the least open major economies in the world. The Trump administration is committed to ensuring free and fair and reciprocal trade. We have prioritised working with the government of India to ensure that US companies have a level playing field, the official told a group of reporters last week.

According to the senior State Department Official, who spoke on condition of anonymity, the Trump administration believes that there is enormous potential to grow India-US trade relationship and to help stimulate the jobs that Modi is committed to bringing to an overwhelmingly young Indian population.