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Relax taxes, tariffs say American firms to Indian government, amid lockdown over Covid-19

US business lobby groups have also recommended expansion on essential services list, clarity on movement of employees as fears of ‘serious disruption’ grows. 

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New Delhi: American companies operating in India have sought relaxation in taxes and easing of tariffs due to the Covid-19 lockdown even as the US industry lobby groups have recommended expansion of the essential services list and clarity on movement of employees as they foresee disruption in their businesses.  

“We are working with the government to ensure our member companies can maintain business operations for critical services like banking, insurance and IT or goods like food, medicine… A comprehensive plan to relax taxes, fees, tariffs as well as monetary policy can ensure liquidity and the much needed economic stimulus to ensure continued consumer and industrial demand,” Nisha Biswal, president, US-India Business Council at the US Chamber of Commerce, told ThePrint. 

Biswal also urged the Modi government to “monitor and re-evaluate the need for expanding the essential services list to ensure the viability of supply chain requirements during this time”.  

USIBC has also written to Prime Minister Narendra Modi recommending setting up a task force under the Ministry of Commerce and Industry, developing central guidelines for essential services and outlining monetary and fiscal stimulus to limit and mitigate near-term economic dislocation among others.  

Some of the companies operating in India in sectors such as banking, insurance, manufacturing and logistics have expressed their concerns to these industry associations. They are worried by the lack of human resources, inadequate bandwidth for work from home ecosystems and supply chain disruptions among others. 

“We recognise that this lockdown will cause serious disruption to your business operations. In the past few days, we have successfully managed to get exemptions for some of our member companies through advocacy to various state governments,” Mukesh Aghi, president and CEO, US-India Strategic Partnership Forum said in a letter to the member companies after the lockdown was announced. 

Aghi said most companies are facing last-mile connectivity issues.  

“The government at the Centre is being proactive but efforts need to trickle down to the bottom. There is also no clarity on movement of employees for those exempt as essential services and allowed to operate,” he added. 

The issue of lack of clarity in the definition of essential services was also echoed by the American Chamber of Commerce in India (AMCHAM India).  

“We are working closely with the Indian government as well as the US Embassy on expanding the essential services list. There are a lot of concerns by the member companies on this issue,” said Ranjana Khanna, Director General CEO, Amcham India. 

Aghi also stressed on the fact that two-way trade between the US and India will get impacted in this fiscal even as companies gear up to face the challenger emerging out of the coronavirus pandemic. 

Also read: Meet the Pune woman behind the first Indian Covid-19 testing kits

US-India trade in pharma, medical devices to take a hit

India is the second-largest exporter of pharmaceuticals to the United States and Washington is the largest exporter of medical devices to New Delhi. However, both these countries have now imposed restrictions in their respective health sectors.  

“There is a strong likelihood that Covid-19 will hit both the United States and India hard. Both countries will be key players in future developments in the medical supply trade relevant to the Covid-19 crisis, as each is a giant on the world stage in pharmaceutical production,” said Mark Linscott, former assistant US trade representative (USTR) for South and Central Asian Affairs.  

Linscott, now a senior fellow with the Atlantic Council’s South Asia Center, also said the US and India should start their own coordination on trade matters relevant to the coronavirus crisis. 

As of 21 March, a total of 54 governments have implemented some type of export curb on medical supplies and medicines associated with the Covid-19 pandemic, including India, France, Saudi Arabia, Taiwan and the UK among others, thereby increasing chances of “copycat actions” from others, according to a report by Global Trade Alert. 

Also read: Johns Hopkins University disassociates from study on India’s possible Covid-19 cases


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