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Bilateral trade between US and India presently stands at $142 billion. | Shutterstock
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New Delhi: The US Tuesday criticised India for its “restrictive” market access and “unjustified” high tariffs imposed on some of its goods, especially in the agricultural sector.

“…Today, India is only the US’ 13th largest export market due to overly restrictive market access barriers. Meanwhile, the US is India’s largest export market, accounting for something like 20 per cent of the total,” US Commerce Secretary Wilbur Ross told a seminar in New Delhi.

“There is a real imbalance. And, it’s an imbalance we must strive to counteract,” Ross said at the seminar on Trade Winds: Indo-Pacific Business Forum and Mission.

The event was attended by US Ambassador to India Kenneth I. Juster and India’s Commerce and Industry and Civil Aviation Minister Suresh Prabhu, among other dignitaries.

Ross, who is on a tour to New Delhi for the US-India Commercial Dialogue, also said though India’s ranking had improved in the World Bank’s ‘Ease of Doing Business’ index, American firms operating here continue to remain “restrictive” due to a plethora of tariff and non-tariff barriers that impact trade.

US envoy Juster also said India continued to have a difficult regulatory market.

Bilateral trade 

Ross said bilateral trade between the US and India currently stands at $142 billion, up almost $16 billion since 2017.

“In the service sector, the United States also had a trade deficit with India last year, of $3 billion. This is especially unusual as we generally have a surplus in services with most countries,” Ross said, adding that this was due to the Indian IT services.

Ross also said the US companies do not cause “scandals” in India.

“American companies need to operate in a transparent environment supported by the rule of law, and a level-playing field. As President Trump has said, trade relationships should be based, and must be based, on fairness and reciprocity,” he added.

‘High tariffs’

Ross highlighted the tariffs that India imposes on various American goods — 60 per cent tariff on automobiles, 50 per cent on motorcycles and 150 per cent on alcoholic beverages.

He also said India has imposed the highest bound tariffs on agricultural products — 113.5 per cent and sometimes as high as 300 per cent on some items.

“These are not justified percentages. They are way too high,” he said.

US-India Commercial Dialogue

Ross is being accompanied by over 100 American firms in his tour. The US-India Commercial Dialogue was scheduled to take place in February, but Ross cancelled his visit at the eleventh hour, citing bad weather.

Ross is believed to have taken up the issues of high tariffs, limited market access and others with Prime Minister Narendra Modi, whom he met Tuesday.

He said that India’s insistence on data localisation wherein foreign companies have to set up their data servers in India would only increase the operating costs.

“Our goal is to eliminate barriers to US companies, operating here, including data-localization restrictions, that actually weaken data security and increase the cost of doing business,” he added.

Trade irritants to be over soon, says Suresh Prabhu

Minister Suresh Prabhu said the “trade irritants” between India and the US would be over soon as New Delhi would begin to buy more and more big-ticket items from America such as aircraft.

“We will start buying big-ticket items from them and soon we will have issues of trade deficit with the US as we will buy more from them,” he said.

No extension of Iran oil waiver

Ross’ visit to India comes at a time when the US ended its waiver to India that allowed New Delhi to import oil from Iran. The waiver, which was granted to eight countries, last November, expired on 2 May.

This issue was discussed during Ross’ meeting with the PM, Finance Minister Arun Jaitley and Prabhu, but an extension on the waiver could not be secured, official sources told ThePrint.

New Delhi was also not able to coax the US into extending the benefits of the Generalised System of Preferences (GSP) on some Indian exports and neither could it convince America to remove the tariff that Washington has imposed on steel and aluminum shipments from India, sources said.

This report has been updated to correct the figure for the rise in India-US bilateral trade since 2017. 

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2 COMMENTS

  1. No use punishing a donkey for being donkey. Ours is a foolish Socialist country and USA has to bear with us until a capitalist becomes the prime minister of India. You and i both know that moment will never come.

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