As the bilateral meeting has resolved the six major pending disputes at World Trade Organisation (WTO) mainly, India is to raise its steel and aluminium exports by about 35 per cent, said the State Bank of India (SBI) in a report on Monday.
The disputes were related to steel, aluminium, renewable energy and solar cells, three of which were raised by the US against India (DS456, DS541 and DS585) and three raised by India against the US (DS436, DS510 and DS547).
Now the US will grant market access to steel and aluminium products under the exclusion process of Section 232 of the Trade Expansion Act 1962. India has agreed to remove the additional duty, i.e., retaliatory tariffs on certain products.
However, the prevailing basic import duty on these products applicable to all imports will continue. This market access will restore opportunities for Indian steel and aluminium exporters, which were restricted since June 2018, it added.
Going forward, the US Department of Commerce will clear 70 per cent of steel and 80 per cent of aluminium applications for products originating in India.
The report also mentioned that PM Modi’s US visit marked a shift in on shoring of chip manufacturing in India. The US chip manufacturers announced an FDI of USD 825 million with a combined investment of USD 2.75 billion to set up a semiconductor assembly and test facility in India.
“Besides this, semiconductor collaboration will extend to systems development under the 6G network,” according to the report.
With multiple disruptive developments taking place in chips manufacturing and supply-chain globally, the strategic alliances between these two nations assume paramount importance to guide the uncertain future amidst escalating geopolitical tensions, it said.
Talking about, the Indo-US defence relationship after this visit, the report stated that it is expected to move under two tracks. The conventional arrangements going forward will include greater collaborations and strengthening of existing foundation agreements.
“This will include leveraging India as the hub of repair and maintenance of naval assets. Further, the repair and maintenance will progressively extend to aircraft as well,” it mentioned.
The development in the conventional domain will also include the transfer of technology for manufacturing jet engines in India to manufacture LCAs and assembling UAVs in India.
A reciprocal defence procurement agreement will also be explored in due course which can increase the share of India in defence trade with the US which has fallen to 19 per cent. Future collaborations in new defence domains will include the collaboration in defence application of space and AI technology.
“This will cover prototyping of projects, testing, collaborative research, and co-production of defence systems,” according to the SBI.
