BackUS concern over new trade ‘barriers’ by India may further strain bilateral ties
US President Donald Trump has repeatedly accused India of resorting to discriminatory trade practicesThings worsened when the US dragged India to the World Trade Organization on its export subsidy programmes
PremiumUS commerce secretary Wilbur Ross’ concerns over “new barriers" proposed by India in sectors such as e-commerce and data privacy, could further strain the already tense bilateral trade relationship.
New barriers to US businesses are still being proposed in some of the most important and promising areas of e-commerce, digital technologies and services, and data privacy, Ross said via video conferencing, during the India-US CEO Forum on the sidelines of the India-US commercial dialogue on 14 February. “We hope that all of you involved in the CEO Forum can address these issues with the goal of expanding our bilateral trade and investment ties."
The key issues discussed at the CEO Forum include e-commerce, data localization, regulation of tech companies, manufacturing of telecom equipment, retroactive tax issues, and market access.
On 26 December, the commerce and industry ministry had tweaked e-commerce rules for online marketplaces that prohibited US firms, such as Amazon and Walmart Flipkart, from selling products from entities in which they have equity participation. The government did not accede to requests from the e-commerce firms to extend the 1 February deadline for complying with the new norms.
Foreign investors who are creating economic value and making significant contributions to employment generation in India should be given adequate time to implement policy changes, said Mukesh Aghi, president, US-India Strategic Partnership Forum.
“The e-commerce amendment was announced without consultation and its impact will ultimately harm the consumer. Amendments should involve a consultative process and preserve the value creation investors are contributing to the development of the emerging e-commerce sector in India. In a global services economy, of which India is an important partner, a free cross-border flow of data is essential," he added.
Since he assumed office in 2016, US President Donald Trump has repeatedly accused India of resorting to discriminatory trade practices that he said have resulted in a large trade deficit for the US.
Things worsened when the US dragged India to the World Trade Organization on its export subsidy programmes, threatening to withdraw the generalized system of preferences (GSP) benefits to Indian labour-intensive exports worth $5.6 billion, and refusing to grant a waiver to India after it unilaterally raised import duties on steel and aluminium invoking its national security provision.
India has increased its oil imports from the US to pacify Trump. In the first five months of this financial year, India imported mineral fuel worth $3.4 billion from the US, against the $4 billion of imports in all of 2017-18.
India and the US are negotiating a trade package that would involve give-and-take from both, but there has been little progress on that front. India seeks a waiver of the unilateral tariff hikes imposed by the Trump administration on steel and aluminium and continuance of GSP benefits. It has deferred its plan to impose tit-for-tat tariffs on 29 US products worth $235 million.
The US looks to the government of India to work with it to achieve reciprocity in trade and to develop an equitable and level playing field for all businesses, Ross said.
The US acknowledges that American merchandise exports to India are growing, but continues to run “chronic trade deficits" with India that have averaged more than $20 billion per year for the past five years, he added.
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