Indian Trade Policies Made Business A Costly Affair: U.S. Report


BANGALORE: Restrictive Indian trade policies have delayed American export and investment to India. A USITC report has said with the U.S. lawmakers asking the Narendra Modi government to address these significant areas of concern as both countries work to strengthen economic relations.

The report revealed,  “The share of U.S. companies adversely affected by restrictive Indian policies rose from 18.8 percent to 26.1 percent between 2007 and 2013, with shares for in

As a result, 60 percent of the affected companies have made strategic changes in response to these barriers, most often directing fewer resources to the Indian market,” reports The Times of India.

Prepared at the request of lawmakers, the report provides information on the effects of a wide range of Indian policies that limit U.S. exports and investment in India.

These policy measures include tariffs and customs procedures, foreign direct investment restrictions, local-content requirements, treatment of intellectual property, taxes and financial regulations, regulatory uncertainty, and other non tariff measures, such as unclear legal liability, price controls, and sanitary standards.

According to Dave Camp, House Ways and Means Committee Chairman, “We remain concerned about systemic and continuing market access barriers identified in the ITC's report that undermine a market-based path to development for India and diminish opportunities for U.S. workers and businesses," reports TOI.

The respected policies have the heaviest effect on U.S. companies in two areas - tariffs and customs procedures, and taxes and financial regulations. Moreover, the other concerns are relating to investment and intellectual property policies have large negative effects on specific industries.

If tariff and investment restrictions were fully eliminated and standards of IP protection were made comparable to U.S. and Western European levels, U.S. exports to India would rise by two-thirds, and U.S. investment in India would get almost double.

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