India and the US are discussing ways to resolve six trade disputes bilaterally, without going through the mechanism of the World Trade Organisation (WTO), an official source said on Tuesday.
These discussions assume significance as Prime Minister Narendra Modi is on a three-day visit to the US from June 21-24 at the invitation of US President Joe Biden and First Lady Jill Biden.
The source, who is aware of the discussions, said that there are six trade disputes for which talks are going on and positive outcomes are expected.
As per the WTO norms, both countries can resolve the issues amicably and on mutually agreed terms and later inform the Geneva-based multilateral organisation about the same.
The trade disputes between the two countries include the US complaint against certain export-subsidy measures by India. In 2019, A WTO dispute panel had ruled that India's export measures are inconsistent with global trade norms.
Another dispute is related to the imposition of customs duties on certain steel and aluminium products by America. In 2018, India approached the Geneva-based WTO against these duties.
In 2018, the US imposed 25 per cent and 10 per cent import duties on certain steel and aluminium products, respectively, on the grounds of national security. In retaliation to the imposition of duties by the US, India increased customs duty on a number of American products such as almonds, walnut, iron and steel items.
According to trade experts, the prime minister's visit would give a major boost to the trade and economic ties between the two countries.
The US is the largest trading partner of India. In 2022-23, the bilateral goods trade increased to USD 128.8 billion as against USD 119.5 billion in 2021-22.
According to WTO rules, a member country can file a case in the Geneva-based multilateral body if they feel that a particular trade measure is against the norms of WTO.
Bilateral consultation is the first step to resolving a dispute. If both sides are not able to resolve the matter through consultation, either of them can approach the establishment of a dispute settlement panel.
The panel's ruling or report can be challenged at WTO's appellate body.
Interestingly, the appellate body is not functioning because of differences among member countries to appoint its members. Several disputes are already pending with this body. The US has been blocking the appointment of the members.