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  February 9th, 2017 | Written by

Urging Congressional Action to Improve US-India Economic Relations

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  • Outstanding issues manufacturers face in India undermine efforts to deepen the US-India relationship.
  • Issues US manufacturers face in India include forced localization, high tariffs, and foreign ownership restrictions.
  • Foreign investment openings have occurred in India over the past two and a half years.

Business leaders representing nearly all sectors of the US economy have sent a letter to the leadership of the US Congress urging them to work for a more robust and reciprocal US-India economic relationship. The letter, sponsored by the Alliance for Fair Trade with India (AFTI), advocated for the advancement of concrete and lasting policy reforms to address ongoing challenges in India that have negatively impacted US industries and jobs.

Among the outstanding issues manufacturers face in India, the letter cites “forced localization measures; high tariffs, including some contrary to India’s WTO commitments; foreign ownership restrictions in a number of sectors, including Business to Consumer (B2C) retail; insufficient protection of intellectual property rights; long and inconsistent government approvals and licenses; and unique and onerous standards and testing procedures” that harm opportunities for manufacturers in the United States and undermine efforts to deepen the US-India relationship.

The letter noted that there have been several steps in the right direction over the past two and a half years since Prime Minister Modi’s election, including foreign investment openings in a few sectors, fossil fuel, and energy efficiency policy initiatives. “But efforts to address infrastructure project permitting and licensing challenges, and passage of legislation related to bankruptcy and tax reforms, concrete and lasting policy changes to address a number of other longstanding issues comprehensively remain elusive,” the letter added.

Organizations signing the letter included the American Chemistry Council, American Foundry Society, Association of Equipment Manufacturers, Distilled Spirits Council of the United States, Motion Picture Association of America, National Association of Manufacturers, New Jersey Business & Industry Association, Recording Industry Association of America (RIAA), Society of Chemical Manufacturers & Affiliates, and the US Chamber of Commerce.

The letter concludes: “The US government, including Congress, should use all available channels to ensure fair play for businesses, investors, and entrepreneurs across the United States, and to support Indian efforts that align with these goals,” including strengthening dialogue channels and active use of appropriate trade enforcement tools.