Washington, D.C. – The U.S. International Trade Commission (USITC) has released a new report slamming India’s trade, investment and industrial policies and detailing their impact on the U.S. economy.
According to the report, tariff and customs procedures as well as taxes and financial regulations “had the most significant effect on U.S. businesses while foreign direct investment caps and intellectual property policies also impacted companies across several sectors.”
If tariff and investment restrictions were fully eliminated and standards of intellectual property (IP) protection were made comparable to U.S. and Western European levels, US exports to India would rise by two-thirds and US investment in India would roughly double, the Trade, Investment, and Industrial Policies in India: Effects on the US Economy report said.
The USITC has been asked by the House Committee on Ways and Means and the Senate Committee on Finance to conduct a second investigation looking at policy changes under the new government. The agency expects to deliver the results to the Committees by September 24.
The report, prepared at the behest of the House Committee on Ways and Means and the Senate Committee on Finance, covers tariffs and customs procedures, foreign direct investment restrictions, local-content requirements, treatment of intellectual property, taxes and financial regulations, regulatory uncertainty, and other non-tariff measures such as unclear legal liability, price controls, and sanitary and phyto-sanitary standards.
India angrily responded to the USITC report, calling it a “unilateral action” that “has no validity.”
A senior official in the New Delhi government told the media that, “India was not party to the investigations and it is the U.S.’ internal decision. The U.S. government has not taken up the matter bilaterally or multilaterally with us. India’s position remains the same as it was last year.”
The USITC report is the second such report released over the past several years by the agency on the tariff and non-tariff trade barriers U.S. companies face while doing business with the Sub-Continent.
The Washington, D.C.-headquartered U.S.-India Business Council, the largest bilateral trade association in the U.S., took a somewhat conciliatory tone when responding to the USITC report.
“There is no doubt that U.S. companies face challenges in India, but many of these issues are institutional in nature and take time and a concerted effort by all stakeholders to resolve,” said Diane Farrell, acting president of the Washington, D.C.-headquartered U.S.-India Business Council.
“As this most recent report suggests, there is a lot of potential for both countries, and we are committed to working alongside our members and both governments to further develop and deepen the two-way commercial relationship,” she said.
President Barack Obama is scheduled to visit India later this month.