US hopes new government will resolve market barrier issues: Ross

Amiti Sen New Delhi | Updated on May 07, 2019 Published on May 07, 2019

Wilbur Ross, US Commerce Secretary   -  Bloomberg

Data localisation, tariff and non-tariff barriers in pharma, medical equipment, cell phones, automobiles need to be sorted out, says US Secretary for Commerce

US Secretary for Commerce, Wilbur Ross, has criticised India for imposing "significant" market access barriers for American companies in sectors such as medical equipment, pharmaceuticals, automobiles, cellular phones and data handling, and has expressed the hope that the new government will address it as early as June.

"Currently, US business faces significant market access barriers in India. These include both tariff and non-tariff barriers, as well as multiple practices and regulations that disadvantage foreign companies…. We applaud India’s commitment to address some of these barriers once the government is re-formed, probably starting in June,” said Ross, addressing the US Trade Winds Indo-Pacific Business Forum and Mission Initiative 2019 in New Delhi on Tuesday.

Ross, who is leading a 100-member business delegation, has met Prime Minister Narendra Modi, Finance Minister Arun Jaitley, and Commerce & Industry Minister Suresh Prabhu.

The US wants India to eliminate barriers faced by its companies in the country, such as data localisation restrictions that weaken data security and increase the cost of doing business, Ross said.

Other obstacles include price control on medical devices and pharmaceuticals, and restrictive tariffs and inspection of electronic and telecommunication products, he added. “Tariff for telecom network equipment, including switches and parts of cellular phones, are as high as 20 per cent, in stark contrast with US rates for the same products exported from India to the US, which is zero. That is not a justified environment,” the Commerce Secretary said.

Commerce & Industry Minister Suresh Prabhu, in his address, pointed out that last year India had imported an additional $8 billion worth of goods from the US, and with high-ticket items such as aircraft that the country could buy from companies such as Boeing in the near future, the trade imbalance would shrink fast.

“There will come a time when we will sit here and discuss how to bring down India’s trade deficit with the US,” Prabhu said.

The US Secretary of Commerce, however, said while US exports to India had gone up last year, the problem was that India’s exports to the US had increased more. “Last year the total trade between our countries totalled a $142 billion, up almost $16 billion. It is also true that US exports to India last year increased by $7.4 billion, about 29 per cent, to $33 billion. But the problem is that India’s exports to the US also increased 12 per cent to $54 billion, resulting in a trade deficit of $21 billion. In the services sector, the US had a trade deficit of $3 billion with India,” Ross said.

He pointed out that India’s average applied tariff rate was 13.8 per cent. “That remains the highest amongst major world economies. It has 60 per cent on automobiles as opposed to 2.5 per cent in the US. It has 50 per cent tariffs on motorbikes and 150 per cent on alcoholic beverages. These are just a few extreme examples,” he said.

He added that farm tariffs in India, too, were very high, with some items attracting a tariff of 300 per cent.

Published on May 07, 2019
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