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US industry has again lambasted the Indian government on domestic trade and industrial policies, alleging it is adversely impacting American firms present here, during a hearing conducted by the US International Trade Commission (USITC).
USITC, a quasi-judicial federal agency giving trade policy advice to the American government, heard the submissions of their industry lobbies on Tuesday that included some large-scale lobby groups representing a host of American companies across all sectors.
The various organisations that gave their report to the body were — International Intellectual Property Alliance, National Association of Manufacturers (NAM), American Insurance Association, US India Business Council and US Chamber of Commerce and Alliance for Fair Trade with India (AFTI), among others.
This new round of investigations were launched by the USITC at the behest of House Committee on Ways and Means and the Senate Committee on Finance, to “examine significant changes since mid-2014 by the Indian government to India's trade and investment policies,” the body said in a statement.
“Given the recent national elections in India and the formation of a new Bharatiya Janata Party-led government, and our interest in receiving the most comprehensive and up-to-date information possible, we now request that the commission conduct a second investigation concerning India's industrial policies that discriminate against US trade and investment since the first ITC investigation,” stated the letter written by the Senate Committee to USITC requesting it to start the investigation.
Post this critical hearing, which will include submissions till June 2, the USITC will form a report which will be the basis of America’s trade policy with India. The agency is expected to deliver the final report on September.
The hearing by USITC comes at a time when the two-way trade between India and US in goods and services has reached $103 billion. Both sides are now aiming to achieve $500 billion.
“Despite the election of Prime Minister Narendra Modi last year on an ‘open for business’ platform, the Indian government has taken very few concrete steps to improve the trade and investment relationship with the US other than engaging in high-level dialogue with the US government,” said Linda Dempsey, vice president (international economic affairs), NAM, in her pre-hearing statement to USITC.
Dempsey said the chamber continues to hear from its members of a “deteriorating trade, investment and property protection environment for manufacturers across many sectors since Prime Minister Modi took office.”
“Over the last several months, the Modi Government has not made any substantive effort to address longstanding issues of concern for US industry. Instead, the flurry of high-level meetings between the US and Indian governments that encouragingly characterized the first several months of the new government has simply resulted in the retention of the status quo. This status quo includes a range of discriminatory policies and practices with which the US,” said Brian Pomper, executive director, AFTI.
According to Patrick Kilbride, executive director of the International IP Global Intellectual Property Center, US Chamber of Commerce, although the Modi-led government has taken steps to address concerns regarding the intellectual property rights (IPR) regime in India, it has failed to pacify the concerns of the American industry.
“Despite the increased attention to IP by the Modi Administration, US industry has become concerned by a number of troubling developments which continue to threaten IP protections in India and, in turn, the greater business environment and India’s economic growth and global competitiveness,” Kilbride said during the hearing.
He specifically pointed the controversial section 3 (d) of the Indian Patents Act, stating that India is using this provision to “deny innovation companies’ patents.” He also exhorted the government to not to use the flexibility of compulsory licensing, laid out under the World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, as a “commercial tool.”
Last week, the US Trade Representative (USTR) in its annual Special 301 Report, threatened India that it might resort to taking “action” if the IPR laws are not implemented properly in the country.
The USITC had conducted a similar investigation last year and the report — Trade and Investment Policies in India — was submitted to the US government on September 2014.
