US wants India to eliminate barriers, remove data restrictions

Chennai: The United States has stated once again that it wants India to eliminate trade barriers for American firms and remove data localisation restrictions.

Visiting US Commerce Secretary, Wilbur Ross, affirmed that he expects the new government due to be formed by June here, will address these ‘issues’.

The issues in question are differences in import duties posed by the Indian and US governments on various goods including automobiles, motorcycles, agri-products and alcoholic beverages.

The goal

“Our goal is to eliminate barriers to the US companies operating here including data localisation restrictions that actually weaken data security and increase the cost of doing business,” Ross said while speaking at the Trade Winds Forum and Trade Mission.

He is leading a delegation of over 100 American businesses in India. “We applaud India’s commitment to addressing some of these barriers once the government is reformed probably in the month of June,” he said in his speech.

“As President Trump has said, trade relationships should be based, and must be based, on fairness and reciprocity. But, currently, US businesses face significant market access barriers in India. These include both tariff and non-tariff barriers, as well as multiple practices and regulations that disadvantage foreign companies,” Ross said.

He said India’s average applied tariffs rate is 13.8 per cent and remains the ‘highest’ of any major world economy, ‘the very highest’.

For instance…

Citing examples, he said, there is a 60 per cent tariff on auto, while the US has 2.5 per cent. India has 50 per cent import duty on motorcycles and 150 per cent on alcoholic beverages, ‘Just a few extreme examples’, he added.

India imposes bound tariff rates — maximum import duty India can charge under global trade rules of WTO — on agricultural products at the average of an ‘incredible’ 113.5 per cent and some are as high as 300 per cent, he said, adding that ‘they are way too high’.

‘We are working diligently with the Indian government and our private sector partners to address market access issues through the US-India commercial dialogue and through the recently re-convened US India-CEO forum,’ Ross said.

Business speak

Ross went on to say that in the World Bank’s Ease of Doing Business report, India climbed an impressive 23 spots this year. ‘But it still ranks 77 out of 190 countries. So, there is lots of room for further improvement,’ he said, mentioning that India is the US’ 13th largest export market due to ‘overly restrictive’ market access barriers.

“In the services sector also, US has a trade deficit with India,” he said, adding last year it was $3 billion. “This is specially unusual. We generally have services surplus with most countries. But in the case of India, the deficit is largely due to IT services,” he said.

Bilateral trade between India and the United States in goods and services grew 12.6 per cent from $126 billion in 2017 to $142 billion in 2018, according to an official release.

The growth in trade was welcomed by both the countries in the bilateral meeting held in the country. The Minister of Commerce & Industry and Civil Aviation, Suresh Prabhu, along with the US Secretary of Commerce, Wilbur Ross, co-chaired the meeting.

Both the sides appreciated the “strong, robust and growing bilateral ties between India and the US across the entire spectrum of trade and commerce,” as per an official press release.

“Both sides agreed to deepen economic cooperation and bilateral trade by ensuring greater cooperation amongst stakeholders, including Government, businesses and entrepreneurs” the release said.

NT Bureau