Indian Ambassador Shringla meets California Governor Newsom, they discuss trade & tariff issues

Ritu Jha-

 

India’s Ambassador in Washington, Harsh Vardhan Shringla, who met California governor Gavin Newsom during the 2019 Pacific Summit of the Bay Area Council in San Francisco, California on Friday, June 21, said that a tariff issue was raised during the meeting.

Ambassador Shringla, spoke on “Economic Prosperity in the Pacific” sharing about his meeting with the governor Newsom, said he has urged the governor to lead a business delegation to India as well as open a trade office in India.

The meeting came at the time when the US and India have been showing a tit-for-tat attitude, and both the countries are levying tariffs on each other. And the US Secretary of State Mike Pompeo visiting New Delhi between June 24-27, in an attempt to strengthen America’s relationship with India and to kickstart a dialogue aimed at resolving some key issues in bilateral trade ties.

It was just this past week that India imposed import tariffs on more than two dozen American products, including 75 percent on almonds from California in response to President Trump’s trade war.

According to the Almond Alliance of California, its almond export is being badly hit by retaliatory tariffs and almond growers in the US are a worried lot now, as the US Department of Agriculture’s (USDA) National Agricultural Statistics Service (NASS) last month predicted a record California almond crop for the upcoming production year. California almond exports to India are worth more than $650 million a year.

Ambassador Shringla told indica when asked if there were any issues that the Governor of California raised about the tariff, he replied, “Yes, the governor did mention that this issue of tariff in both countries are of concern to people who are directly affected.”

“I told him that both the commerce minister and the USTR (United States Trade Representative) had spoken over the phone and agreed to meet at some stage to discuss this issue and try to resolve it,” the Ambassador said.

“And we are confident that we can find the solutions that can be satisfying,” he assured.

When indica asked why he thought the issue will get better now, as it has been going on for several months and if there is some sort of hitch, the Ambassador said, “No, there was no hitch, we were pre-occupied for the past few months because of the general elections in India.”

Adding further he said, “There have also been some differences on how we approach these issues, but I think now with the full mandate we should be able to do this…and with the new government [Modi] will smoothen out the small wrinkles.”

When asked if he thinks this will become a trade war between the US and India, similarly to the trade war between the US and China, he defended the situation and said, “I think there is no trade war with India, it is just the question of recalibrating the trade relation and making it one that both sides can benefit from.”

The Ambassador said that at the meeting, the governor looked enthusiastic after his invitation to India as he has been to Bangalore, India, known as the “Silicon Valley of India” in 2009 when he was Mayor of San Francisco.

The new report “Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age” published by the Economic Institute of the Bay Area Council (BACEI) shows that the trade tensions have flared-up, when the US declined to grant India a waiver from its global tariffs of 25% on steel and 10% on aluminum imports, formally implemented on March 8, 2018. At that time, only about 2% of India’s steel exports and 2% of its aluminum exports were sold to the US, representing 2.4% of US imports of steel and 2% of US imports of aluminum.

In June 2018, India notified the World Trade Organization (WTO) of its decision to retaliate with an equivalent amount—some $241 million—in tariffs on US exports of apples, almonds (with India as the largest worldwide market for US growers), palm oil, cashews, metal products, and other items, which were originally scheduled to take effect in August 2018.

Since then, India has repeatedly delayed implementation of the new tariffs, saying that it wanted to allow time for negotiations with the US, but this was all in vain.

In March of this year, President Trump announced that the United States intends to terminate India’s designations as a beneficiary developing country under the Generalized System of Preferences (GSP) program because they no longer comply with the statutory eligibility criteria. The imposition of steel and aluminum tariffs by the US in 2018 led India to impose retaliatory tariffs in 2019.

The tension was high on Wednesday, June 19, when a report was published by Reuters on the US government considering a cap on H1B Visas. The Indian government proposals to require data generated in India to be exclusively stored in India, and proposed data privacy regulations that are among the most stringent in the world, have drawn strong opposition from both Indian and US IT and financial services companies.

The Ambassador commented about the Reuters report, “I think there was no basis for that report. It is simply speculative because the State Department has clarified that there is no such plan.”

 

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