Concerned over its low share in India’s farm sector imports, the US has initiated an investigation into protectionist measures undertaken by New Delhi and their bearing on American exports.
“The US International Trade Commission (ITC) has launched an investigation into the effects of tariff and non-tariff measures on US agricultural exports to India,” ITC said on its website.
The investigation follows a complaint by the US Senate Committee on Finance, which highlighted the issue of “disproportionately low US share in India’s agricultural imports”.
“While US exporters can provide individual examples of trade measures that prevent their sales to India, the extent to which trade and investment measures account for the disproportionately low US share of India’s agricultural imports remains largely undocumented,” the Committee on Finance said in the letter to ITC.
According to the Economic Research Service of the US Department of Agriculture (USDA), the India-US agricultural trade has been expanding at 9 per cent every year since 1990, reaching $17 billion in 2007.
However, according to estimates, India maintains a large positive agricultural trade balance with the US as its exports to America was $1.2 billion, while Washington’s exports to India stood at $475 million.
An Indian agricultural trade expert Vijay Sardana said, “It is well known that the US is heavily subsiding its agricultural products for exports and if the Indian government is building safeguards within the given provisions of the WTO, it should not be considered as trade barrier.”
He also said according to the Centre for Agricultural Bioscience International, if India imports farm products indiscriminately from the US there would be a risk of introducing unknown pests and diseases into the country.
“The US took almost 20 years to clear Indian mangoes from quarantine threat. If India is taking steps to prevent quarantine threats as per the WTO norms, there is nothing wrong in it,” Sardana added
The ITC would provide an overview of the Indian agricultural market, a description of the principal measures affecting Indian agricultural imports and non-tariff measures on US agricultural exports to India.
It would also provide foreign direct investment affecting US agricultural products in India and an evaluation of the impact of India’s food marketing and distribution system.
The report is expected to be submitted on November 12.
