US presses India on IP shield, market access and trade barriers

Suresh Prabhu brings up the issue of the unsigned totalization agreement; existing law is adversely impacting Indian workers, he said

Seeking to achieve a “more balanced” trade relationship, the Trump administration has pressed India on key issues such as market access, lifting of trade barriers and intellectual property protection.

During the first US-India bilateral Trade Policy Forum (TPF) under the Trump administration, which was attended by US Trade Representative Robert Lighthizer and Union Minister of Commerce and Industry Suresh Prabhu, India strongly differed with the American position on many of the contentious issues.

Describing his discussions with Lighthizer as “positive”, Prabhu said “despite differences over minor issues”, there was alignment on “capturing the huge potential” of bilateral trade.

Lighthizer said the US pressed for strong outcomes across a number of areas, including non-science-based barriers to agricultural trade, continuing and new regulatory and technical barriers to trade that impact sales of US high technology and other products. The US delegation also pressed India in a number of agricultural and industrial sectors, market access in services and protection and enforcement of intellectual property rights.

India also said the Totalisation and Social Security Act of the US discriminates against Indian workers in the US, who end up losing their social security contributions because of a discrepancy in the visa and social security regimes. Totalisation is about allowing temporary Indian workers in the US to repatriate their social security contributions when they leave the country, commerce ministry sources said. 

India wants early conclusion of the issue, aiming to protect the interests of Indian professionals who contribute around $1 billion (Rs 6,670 crore) each year to US social security. 

Under the proposed pact, professionals of both would be exempted from social security taxes when they work for a short period in the other country.

On this note, the issue of increase in visa fee and reduction in the number of available H-1B and L-1 visas proposed by US lawmakers was discussed. India has reportedly termed the move protectionist and said it has had an adverse impact on services trade. 

During the meeting, Lighthizer also expressed concern about the $29.6-billion US trade deficit with India. He urged India to “further liberalise” the economy to facilitate American exports. “Our work under the Trade Policy Forum focused on achieving progress towards a more balanced trade relationship,” Lighthizer said after the conclusion of the meeting.

US-India trade has grown significantly in the last few years and has the potential to span every sector of the economy, he said. “To increase reciprocal trade, we will continue to seek to identify and address trade barriers related to goods, including manufactured and agriculture, services and intellectual property rights. The US objective is to increase trade flows between our two countries and to decrease our bilateral trade deficit,” the top American trade official said.

Lighthizer exuded confidence that with continued work, the two countries would be able to accomplish these goals. The USTR acknowledged that cross many of the areas, “both sides had differing views that could not be resolved immediately”.

However, there was emphasis that it was important to conduct discussions on these areas in the TPF and a commitment to redoubling efforts in the future across all areas. There was agreement that it is critical to continue strong engagement over the coming months in order to achieve concrete outcomes before the next TPF, the USTR said.

Later addressing a meeting of US India Business Council, Prabhu said Prime Minister Narendra Modi is working to drive policy changes across all major sectors to drive growth. India growing at seven-eight per cent will double the economy to $5 trillion in the coming years, he said, adding that opportunities for US companies are aplenty.

In 2016, India’s GDP was estimated $2.3 trillion.

Prabhu said Indian diaspora continues to support American growth. Almost 14 Indian-origin entrepreneurs have built billion-dollar companies in the US, Prabhu said. India-US bilateral trade has increased by 10 per cent since 2014 reaching $114 billion in 2016. “We are committed to take that up to $500 billion in the medium term.”

The minister also told US business community that India is keen to promote industries of the future including Genomics, which he said has a huge potential of partnership between India and the US in this area.

India is currently America’s ninth largest goods trading partner with $67.7 billion in total (two way) goods trade during 2016.