US companies seek 'fair play' in Indian market

Group of 20 American business organisations and industry groups wrote to Congressional leadership

Asserting that US businesses continue to face an "evolving array" of tariff and non-tariff barriers in India, a group of 20 eminent American business organisations and industry groups in a letter to Congressional leadership have sought a "fair play" for them in the huge Indian market.

"The US government, including Congress, should use all available channels to ensure fair play for businesses, investors, and entrepreneurs across the US, and to support Indian efforts that align with these goals," the group said in a letter to top Congressional leadership including the House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell, days after the inauguration of the Donald Trump administration.

"In particular, it is critical for the US to use actively both existing and new platforms and tools to raise and resolve longstanding issues," the letter said, adding that the Strategic and Commercial Dialogue and TPF, for example, have been valuable opportunities for senior level exchanges between the two governments.

"In the hands of a new administration, and with robust oversight and encouragement from leaders in Congress as well as greater private sector participation, the S&CD and TPF can be improved and serve as opportunities to address concretely areas of mutual economic interest that deepen the US-Indian commercial relationship," the letter said.

"Businesses in the US continue to face an evolving array of tariff and non-tariff barriers, both longstanding and new, which impede businesses and manufacturers in the United States from competing fairly in India and creating jobs here at home," the letter said.

"Similarly, where appropriate, WTO dispute settlement has played and should continue to play a key role in ensuring that India follows through on its international commitments," said the letter signed by Advanced Medical Technology Association (AdvaMed), American Business Conference (ABC), American Chemistry Council (ACC), American Foundry Society (AFS), Association of Equipment Manufacturers (AEM), Biotechnology Innovation Organisation (BIO), and CropLife America.

"As a result, the economic relationship between the US and India remains unbalanced and significantly underperforming its potential. The US market is largely open to India and has become the second-largest destination for Indian exports worldwide," it said.
 

India is the single largest beneficiary of the US Generalised System of Preferences (GSP) programme, which allows most Indian imports to enter the US duty-free.

In contrast, US exports to India lack reciprocal access, facing high tariff and non-tariff barriers, and India imports less from the US than from much smaller economies like Singapore (whose economy is less than one-seventh of India's size) and the UAE (less than one-fifth), the letter said.

"These barriers include forced localisation measures; high tariffs, including some contrary to India's WTO commitments; foreign ownership restrictions in a number of sectors, including Business to Consumer (B2C) retail; insufficient protection of intellectual property rights; long and inconsistent government approvals and licenses; and unique and onerous standards and testing procedures," it said.

"These barriers only serve to discourage globally competitive industries in the United States from participating fully in India's economy and create unfair competitive challenges for US companies," the letter said.

Modi has set a goal of breaking into the top 50 countries by the 2018 Doing Business Report, an ambitious goal that could enable Indian and American business leaders alike reach new customers, sell new products, and create more jobs for more workers - but that would require a significant acceleration in domestic reforms, the letter said.

Other signatories to the letter are Distilled Spirits Council of the United States (DISCUS), Illinois Manufacturers' Association, INDA, Association of the Nonwoven Fabrics Industry, Motion Picture Association of America (MPAA), National Association of Manufacturers (NAM), National Foreign Trade Council (NFTC), New Jersey Business & Industry Association, and Pennsylvania Manufacturers' Association.

It has also been signed by Pharmaceutical Research and Manufacturers of America (PhRMA), Recording Industry Association of America (RIAA), Society of Chemical Manufacturers & Affiliates (SOCMA), US Chamber of Commerce (USCC), US Council for International Business (USCIB).

The letter said while there have been several steps in the right direction over the past two and a half years since Prime Minister Narendra Modi's election, including foreign investment openings in a few sectors, fossil fuel and energy efficiency policy initiatives, efforts to address infrastructure project permitting and licensing challenges, and passage of legislation related to bankruptcy and tax reforms, concrete and lasting policy changes to address a number of other longstanding issues comprehensively remain elusive.