Home / News / India /  Atmanirbhar Bharat may limit trade ties: US envoy

NEW DELHI : US ambassador to India Kenneth Juster on Tuesday expressed doubts whether the “Atmanirbhar Bharat" flagship programme of self reliance of Prime Minister Narendra Modi’s government was compatible with New Delhi’s stated intention to be part of the global value chains and carve out a reputation as an exporter to the world.

If India’s self-reliance programme led to higher tariff and non-tariff barriers to trade, this would “limit India’s capacity to truly integrate into global value chains and, in the process, raise prices for Indian consumers", Juster said at an event organized by the Observer Research Foundation think tank in New Delhi.

India had unveiled the “Atmanirbhar Bharat" programme in May to kick-start the economy, which was subjected to a hard lockdown in the preceding weeks to stem the transmission of coronavirus in a country of more than a billion people. The Indian government says that the programme will help India manufacture for the world and improve its position in global supply chains.

Juster also listed growing restrictions in India on market access for certain US goods and services, increasing tariffs, new limitations on the free flow of data, and a less-than predictable regulatory environment for investors as some of the factors contributing to “frictions and frustrations" in India-US trade ties.

The US “has a strong stake in India’s growth and prosperity, both because of our longstanding friendship with the people of India and because a strong economy will underpin India’s growing role on the global stage", he said.

Countries were looking at diversifying from Chinese-led supply chains after the sudden stoppage of goods from factories in China following the coronavirus outbreak, Juster said. As such, “India has a strategic opportunity to become an alternative destination for manufacturing investments in the Indo-Pacific region. However, to fully seize this opportunity, the Indian government may well need to take further action", he said.

“Ultimately, these will be choices for the government of India. Our experience is that excessively managed markets tend to create inefficiencies, leading to slower growth. On the other hand, trade openness historically has produced positive results for the Indian economy, its job market, and its consumers."

Juster also expressed concern that despite persistent efforts the two countries were unable to seal a trade deal, talks for which have been going on for several years.

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