IAS Gyan

Daily News Analysis


11th March, 2023 International Relations

Disclaimer: Copyright infringement not intended.

Context: India and the United States signed a memorandum of understanding (MoU) that will pave the way for creating a semiconductor sub-committee under the Commercial Dialogue between the U.S. Department of Commerce and India’s Ministry of Electronics and Information Technology (MeitY) and the Ministry of Commerce.


Key features of the Commercial Dialogue:

  • Creating reliable supply chains,
  • Diversifying and friend-shoring [sourcing of material from countries with similar social and political values],
  • Facilitating climate and clean technology cooperation, inclusive digital growth, talent development, post-pandemic economic recovery, and
  • Focus on cooperation.


  • In the last few years, India-U.S. bilateral relations have developed into a "global strategic partnership",based on shared democratic values and increasing convergence of interests on bilateral, regional and global issues.
  • The two countries have created a lot of opportunities to reinvigorate bilateral ties and enhanced cooperation under the motto --- “Chalein Saath Saath: Forward Together We Go”.

High-level dialogue mechanisms:

  • India-U.S. Commercial Dialogue: The India-U.S. Commercial Dialogue is led by the Minister of Commerce and Industry (CIM) and the U.S. Secretary of Commerce.
  • India – U.S. Economic and Financial Partnership: The India – U.S. Economic and Financial Partnership is led by the Finance Minister (FM) and the U.S. Secretary of the Treasury.
  • India-U.S. Trade Policy Forum: The India-U.S. Trade Policy Forum is led by CIM and the U.S. Trade Representative (USTR).

Trade and Economic:

  • The U.S. is India’s largest trading partner, goods and services combined.
  • Bilateral trade in goods and services grew by more than 10% per annum over the past two years to reach US$ 142 billion in 2018.
  • India’s goods exports to the U.S. were valued at US$ 54 billion and India’s goods imports from the U.S. were valued at US$ 33 billion.
  • India’s services exports to the U.S. were valued at US$ 28.7 billion and India’s imports of services from U.S. were valued at US $ 25.8 billion.
  • direct investments in India are estimated at about US$ 44.5 billion whereas Indian FDI in U.S. is estimated at US$ 18 billion.


  • The multi-faceted cooperation between India and the U.S. in the field of Science and Technology has been growing steadily under the framework of the India-U.S. Science and Technology Cooperation Agreement signed in 2005, renewed in 2019.
  • The Indo-U.S. Science & Technology Forum was established to promote cooperation in Science, Technology and Innovation.
  • Both countries also have a long history of cooperation in civil space arena that includes cooperation in earth observation, satellite navigation, and space science and exploration.
  • The India-U.S Joint Working Group on Civil Space Cooperation regularly reviews the status of cooperation and identifies new areas for furthering space cooperation.
  • ISRO and NASA are also working towards intensifying cooperation in Mars exploration, heliophysics, and human spaceflight through relevant working groups between both sides.


  • Trade related: like removal of India from its list of developing countries and taking off India from list of beneficiary-developing countries under its scheme of Generalized System of Preferences.
  • Tariffs war: In 2018, the US imposed additional tariffs of 25% on steel and 10% on aluminum imports from various countries, including India, India’s refusal to remove the 20% tariffs on ICT products.
  • WTO disputes: like Capping prices of medical devices by India, greater Indian market access for American agriculture and dairy products etc.
  • IPR: India is also on U.S.’s Priority Watch List.
  • Trade deficit: India enjoys a trade surplus with US. The trade gap between the countries has increased to USD 17.42 billion in 2019-20 from USD 16.86 billion in 2018-19. It is one of the concerns of US officials.
  • IPR issues: Recently, the US placed India on its ‘Priority Watch List’ among other countries over the issue of Intellectual Property Rights (IPR). India has been alleged for not taking sufficient measures to improve its IP framework which has negatively affected the US right holders in the past years. According to the US, weak IP regime in India makes it tough for innovators to receive and maintain patents in India, especially pharmaceuticals. Insufficient enforcement actions, copyright policies that do not properly incentivize the creation, commercialization of content, and an outdated and insufficient trade secrets legal framework are some of the issues mentioned by plan report of Office of the United States Trade Representative (USTR).


Q) Discuss the various facets of India-US Commercial Relations. (150 words)