US exporters proceed to come across important limitations in India: report

The Biden administration has alleged that US exporters continued to come across important tariff and non-tariff limitations that impede the imports of its merchandise into India.
In its annual 2021 National Trade Estimate Report on Foreign Trade Barriers, the US Trade Representative (USTR) mentioned on Wednesday that whereas the Indian authorities pursued ongoing financial reform efforts, it additionally continued to advertise programmes like ‘Make in India’ that favour home manufacturing over importation.
“Additionally, in May 2020, Prime Minister Narendra Modi announced the “Self-Reliant India” (Atmanirbhar Bharat) initiative to extend self-sufficiency by selling home trade and lowering reliance on international suppliers,” the USTR mentioned within the India part of the voluminous report operating into greater than 570 pages.
“The United States has actively sought bilateral and multilateral opportunities to increase access to India’s market,” it mentioned. “Nevertheless, U.S. exporters continue to encounter significant tariff and non-tariff barriers that impede imports of U.S. products into India.”
According to the report, the US items commerce deficit with India was $23.8 billion in final 12 months, a 1.7-per-cent improve ($389 million) over 2019. The items exports to India have been $27.4 billion, down 20.1 per cent ($6.9 billion) from the earlier 12 months. Imports from India have been $51.2 billion, down 11.3 per cent.
India was the US’ twelfth largest items export market in 2020.
Exports of providers to India have been an estimated USD 24.3 billion in 2019 and imports have been USD 29.7 billion. Sales of providers in India by majority US-owned associates have been USD 33.1 billion in 2018, whereas gross sales of providers within the US by majority India-owned companies have been USD 18.3 billion, the report mentioned.
“US foreign direct investment in India (stock) was USD 45.9 billion in 2019, a 8.1 percent increase from 2018,” it mentioned, including that the nation’s direct funding in India was led by skilled, scientific and technical providers, manufacturing and wholesale commerce.
The annual report supplies an in depth stock of serious international limitations to US exports of products and providers, funding, and e-commerce.
The first report of the Biden Administration mentioned that since 2014, the Indian authorities promoted the ‘Make in India’ marketing campaign, a drive to construct the nation’s manufacturing capability partly by reducing limitations to international funding and introducing regulatory reforms.
As a part of the marketing campaign to encourage home manufacturing, India has raised duties on two broad teams — an assortment of labour-intensive merchandise; and electronics and communication units, together with cell phones, televisions, and related elements and elements, it mentioned.
The report alleged that India’s tariff regime was additionally characterised by giant disparities between the World Trade Organization-bound charges and most-favoured-nation-applied charges.
India’s WTO-bound tariff fee averaged 50.8 per cent, whereas its utilized MFN tariff for 2019 averaged 17.6 per cent.
“India’s bound tariff rates on agricultural products are among the highest in the world, averaging 113.1 percent and ranging as high as 300 percent. Applied agricultural tariff rates are also high, averaging 38.8 percent,” it mentioned.
“While India’s utilized tariff charges for sure agricultural merchandise are decrease, the charges nonetheless current a major barrier to commerce in agricultural items and processed meals (e.g., poultry, potatoes, citrus, almonds, apples, grapes, canned peaches, chocolate, cookies, frozen French fries and different ready meals utilized in quick-service eating places).
“In addition, while India has bound all agricultural tariff lines in the WTO, nearly 30 percent of India’s non-agricultural tariffs remain unbound,” the report mentioned.