India has highest general barriers of any large economy: US Ambassador

US Ambassador pitches for fewer barriers between the two nations

India continues to have the highest general barriers of any large economy in the world, US Ambassador to India, Eric Garcetti, said on Thursday, while pitching for fewer barriers between the two nations. He was speaking at a session organised by the Indian Chamber of Commerce (ICC).

“We haven’t raised our ambitions to a bolder and more ambitious larger trade where we accelerate the goals that we have,” he said, while responding to a question from the audience seeking restoration of the Generalised System of Preferences (GSP).

“You will not get there with technology. You will not get there with a supply chain. You will not get there by addressing climate change if we don’t have greater trust between each other. And trust is established by having fewer barriers,” the Ambassador said.

 

“India still has the highest general barriers of any large economy in the world,” he added.

He said that tax on import of any piece of manufacturing does not protect the industry but delays the industry from moving forward. He also said that there was increasing acknowledgement of that among the government of India and the states as well.

On the relations between the two nations, Garcetti called it one of the most significant moments in history because “the acceleration of our relationship has never been this fast”.

The Ambassador said that the recent visit by Prime Minister Narendra Modi to the United States included that the two nations work closely to bring down the tariffs that were against agricultural products "and vice versa for us to make exceptions on some limitations on steel that we need from India”.

However, he also said, “We can’t make these things the exceptions. We need to make them the rule in the United States and in India.”

“Manufacturing iPhone should not be an exception of different waivers. It should be for any company that wants to manufacture technology here,” he added.

On semiconductors, a focus area for India, Garcetti said, “I don’t want to see India do just the simple semiconductor work or the design and final packaging.”

“We would like to see India be a powerhouse straight through with the most complicated semiconductors but right now, there are too many rules that prohibit that, and there is not enough security that the investments in India will be protected,” he added.

“We need to work together to ensure that laws are passed here that guarantee a decade of investments because it takes years for profitability of a semiconductor manufacturing plant,” the Ambassador further said.

For the United States, he said, protectionism was from a different administration. “It wasn’t the Biden administration that put it in place. It was the previous one. We have inherited the sins of the past,” he said.

West Bengal

Ambassador Garcetti, who was on a two-day visit to Kolkata, said that there were strong ties between the United States and West Bengal for a long time. “So many of our American businesses are looking at ways to expand their operations in the state,” he said.

“We are looking at ways that we can invest in infrastructure in the way that Amazon and Walmart/Flipkart are taking advantage of the state’s strategic location, and making this a logistics capital not just for India but for a higher gateway between South Asia, South East Asia and East Asia together,” he said.

During his visit, the Ambassador met Amit Mitra, Principal Chief Advisor to West Bengal Chief Minister, and West Bengal Governor, C V Ananda Bose.