"New Trade Deals and India's Dependence on US Exports"
Section 301
US trade law tool allowing tariffs after investigating 'unfair trade practices' by another country.
Section 232
US trade law provision allowing tariffs on national-security grounds, used for steel and auto parts.
India's trade policy works within rules set by the World Trade Organization (WTO), which India joined in 1995. A core WTO rule is Most Favoured Nation (MFN) treatment. This means a country must offer the same tariff treatment to all trading partners, except under a free trade agreement. The United States has increasingly stepped outside this multilateral system. Instead of negotiating through the WTO, it has used its own domestic trade laws to set tariffs on individual countries, including India.
India has responded by building its own network of bilateral and regional trade deals. India came late to such deals. It has signed agreements like the Comprehensive Economic Partnership Agreement (CEPA) with the UAE, the Economic Cooperation and Trade Agreement (ECTA) with Australia, and the Trade and Economic Partnership Agreement (TEPA) with EFTA nations (Iceland, Liechtenstein, Norway, Switzerland). In each deal, India keeps a 'sensitive list' of products. These products are kept out of tariff cuts to protect domestic farmers and small industry. This same instinct to protect sensitive sectors also shapes India's position at the WTO.
At the WTO's Doha Round talks, India has long pushed for a 'Special Products' category. This would let developing countries avoid tariff cuts on farm goods that affect the livelihoods of small farmers. These talks have been stuck for years. Rich countries resist a wide Special Products list. This stalemate is one reason countries, including India and the US, have turned to bilateral deals and unilateral tariffs. They no longer wait for a global consensus.
The current US tariff regime on India has shifted through several legal tools. First, the US used emergency economic powers under a law called the IEEPA. It imposed 'reciprocal tariffs' on almost all trading partners. India faced a 26% rate before the higher country-specific rates were paused. The US Supreme Court later struck down this use of emergency powers. This forced Washington to use other laws.
The US then used Section 122 of its trade law for a temporary 10% import surcharge. More recently, it used Section 301 of the US Trade Act, 1974. Section 301 lets the US impose tariffs after investigating 'unfair trade practices'. …
What are the challenges before the Indian economy when the world is moving away from free trade and multilateralism to protectionism and bilateralism? How can these challenges be met?
How would the recent phenomena of protectionism and currency manipulations in world trade affect macroeconomic stability of India?
Consider the following pairs of US trade law provisions and their basis for imposing tariffs:
1.Section 301 - Investigation into unfair trade practices
2.Section 232 - National security grounds
3.IEEPA - Emergency economic powers
4.Section 122 - Temporary import surcharge
How many of the above pairs are correctly matched?
The use of which US law as the basis for 'reciprocal tariffs' on trading partners, including India, was struck down by the US Supreme Court?
With reference to India's regional and bilateral trade agreements, consider the following statements:
1.India has signed trade agreements such as CEPA with the UAE and ECTA with Australia.
2.The utilisation rate of India's trade agreements by its own exporters has historically been high, generally above 50%.
Which of the statements given above is/are correct?
Which of the following statements about the WTO's 'Special Products' category is/are correct?
1.It allows developing countries to avoid tariff cuts on certain sensitive farm products.
2.It was finalised under the Doha Round with full agreement among all WTO members.
Select the correct answer using the code below:
Which of the following best explains why the World Trade Organization's Most Favoured Nation (MFN) principle permits countries to sign separate Free Trade Agreements (FTAs)?
Want the full note, Prelims Facts & MCQ answers?
Create a free account — takes less than a minute.
Create free account