Working with US to address trade issues: Suresh Prabhu

New Delhi: The government on Tuesday said it is working with the US to resolve all trade issues even as America has decided to review India's eligibility to enjoy duty-free access for certain products under a tax benefit scheme.

The US has also added India to its watch list of countries alleging questionable foreign exchange policies. Besides, it has dragged India to WTO's dispute settlement mechanism challenging Indian export incentive schemes.

Commerce and Industry Minister Suresh Prabhu said the US is India's important trading partner and the latter has a large trade surplus with it.

"We have special relation with the US, which is multi-faceted, multi dimensional and also very strategic. We are working with the US to address the trade issues," he told reporters here.

He said that over four million Indians are living in the US and it is one of the major markets for goods and services exports.

"In a situation like this, the US has taken certain unilateral actions. So we will follow the rules of WTO (World Trade Organisation) as well as we will talk to them. We are completely in the control of situation," he added.

Prabhu said that the assistant US Trade Representative (USTR) was here last week and "we are in touch with the US at all levels".

On the issue of imposing high duties on steel and aluminium by the US, he said India's exports of these two commodities to America is not significant.

"I can assure you one thing that the only guiding principle for engagement with the US is to protect India's commercial interest in its entirety," he added.

As many as 3,500 Indian products from sectors such as chemicals, medical devices and engineering get duty free access to the US market under the Generalized System of Preferences (GSP), introduced in 1976.

The review can impact exports of those 3,500 Indian products to the US market as removal of duty benefits would make those items uncompetitive.

According to the USTR, the total US imports under GSP in 2017 was USD 21.2 billion, of which India was the biggest beneficiary with USD 5.6 billion, followed by Thailand (USD4.2 billion) and Brazil (USD 2.5 billion).

The bilateral trade between the countries has increased to USD 64.52 billion in 2016-17 from USD 62.11 billion in the previous fiscal.