The US industry faces serious foreign trade barriers in India, according to the United States Trade Representatives 1997 national trade estimate report on foreign trade barriers.
These barriers are in the areas of additional charges on imports, import licensing problems, customs procedures, government procurement practices, prohibition of defence procurement through agents, piracy of copyrighted material, lack of intellectual property protection, cable piracy, limits on foreign banks and securities and motion pictures in India.
The 1997 estimate report, which lists a wide range of barriers that restrict US exports in several nations, was released on April 1.
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The report on India points out the country maintains a variety of additional charges on imports that might be border tax adjustments (the so-called countervailing duties), further raising the import costs as they enter the stream of domestic commerce.
The government guidelines state importers of theatrical films must obtain a certificate from the Central Board of Film Certification stating that the film is suitable for import. This, the US industry says, constitutes a pre-censorship quality check obstacle.
The report says the Indian governments procurement practices and procedures are neither transparent nor standardised, and discriminate against foreign suppliers. Despite the easing of policy requirements to discriminate, local suppliers are favoured in contracts where their prices and quality are acceptable.
Another area of discrimination affecting US suppliers is the prohibition of defence procurement through agents. Most American firms do not have enough business in India to justify the high cost of resident representation.
Some government entities routinely use foreign bids to pressure domestic producers to lower their prices, permitting the local bidder to re-submit tenders when a foreign contractor has underbid them.
When foreign financing is involved, principal government agencies tend to follow multilateral development bank requirements for international tenders. However, in other purchases, current procurement practices usually result in discrimination against foreign suppliers when goods or services of comparable quality and price are available locally, it is argued.
The report says cable piracy continues to be a significant problem, with tens of thousands illegal systems in operation in India. Copyrighted US product is transmitted over this medium without authorisation, often using pirated video cassettes as source materials.
It argues both state-owned and private Indian firms are engaged in types of anti-competitive practices with little or no fear of reaction from government overseers or action from a clogged court system.