In a sharply-worded critique of India’s policies to regulate liberalisation, intellectual property, information technology and agriculture, expert witnesses testifying to the U.S. House of Representatives on Wednesday suggested that India was discriminating against American firms seeking to deepen bilateral trade.
Arvind Subramanian, Senior Fellow at the Petersen Institute think-tank here, said that U.S. firms were “increasingly facing implicit but substantial discrimination in India’s large and growing market because of India signing – or on the verge of signing – free trade and economic partnership agreements with its largest trading partners that are all major competitors to the US: Europe, Japan, Singapore, ASEAN, and possibly ASEAN-plus 6.”
A bigger challenge
He added that this discrimination could soon be a bigger challenge for U.S. business than some recent sectoral measures, especially as regional trade agreements provided more favourable access to non-American suppliers and because India’s tariffs and barriers could be high.
Similarly Daniel Twining, Senior Fellow for Asia at the German Marshall Fund think-tank, worried about competition from non-U.S. firms operating in India, noting that India had enacted or was negotiating trade agreements with Japan, the European Union, ASEAN, and a range of other partners – but not the U.S.
Mr. Twining particularly focused Congressmen’s attention on slow progress with a Bilateral Investment Treaty (BIT), arguing that “Indian negotiators continue to skirmish with their American counterparts not only in bilateral channels, but in multilateral bodies like the World Trade Organization, where the U.S. and India have lodged various cases against each other.”
He criticised the trade negotiations process for too frequently degenerating into “narrow disputes over things like pistachio nuts and chickens,” saying, “This is no way to build a strategic economic relationship between the world’s largest democracies.”
Allen Johnson, former Chief Agricultural Negotiator in the Office of the U.S. Trade Representative, drew attention to India’s high tariff barriers in the agricultural sector, pointing out that India had some of the highest tariffs in the world, with its maximum allowed tariffs generally ranging from 100 per cent to 300 per cent and averaging nearly 120 per cent. He admitted, however, that applied tariffs tended to be lower, averaging around 35 per cent, as India needed to import food to meet domestic demand.
Dean Garfield of the Information Technology Industry Council similarly argued that in the IT sector, despite extraordinary bilateral success “the Government of India is implementing, or considering implementing, a number of major policy decisions we believe would undermine, if not outright dismantle, the progress India has made.”
Specifically Mr. Garfield cited India’s roll-out of a preferential market access policy, or “PMA,” and India’s current decision to “stand on the sidelines during the on-going negotiations to expand the Information Technology Agreement” as examples of policies that “will undermine the ability of U.S. and foreign ICT companies to compete fairly in this important market.”
Last but not least, Roy Waldron, Chief Intellectual Property Counsel for leading drug manufacturer Pfizer, said that despite being a member of the WTO India had “systematically failed to interpret and apply its intellectual property laws in a manner consistent with recognised global standards,” and that according to the Global Intellectual Property Centre’s International Intellectual Property Index, India ranked “dead last” for overall protection of intellectual property.