![]() ![]() The overriding factor driving the strategic relationship is “China”. ![]() The re-launching of India-US TPF provides a robust institutional mechanism to reboot the India-US economic relations. Both countries agreed to finalise work on market access facilitation for mangoes and pomegranates, and cherries and alfalfa hay for animal feed from the US during the recently concluded TPF meeting. The major TBT issues for US exporters to India include Rejection of USDA Certified Organic Consignments, restrictions on imports of livestock genetics, onerous requirements on dairy imports etc. Some of the products that face high duty in India and are of interest to the US include vegetable oils, apples, corn, motorcycles, automobiles, flowers, walnuts and alcoholic beverages. The US agri-products face both tariff and non-tariff barriers (NTBs). ![]() ![]() Continuous engagement between the two countries though India-US TPF’s Intellectual Property Working Group is the way forward.īoth India and the US are keen on exporting agricultural products to each other. Some of the key issues pertaining to India Patents Act for the US include potential threat of patent revocations, lack of presumption of patent validity, trademark counterfeiting and the narrow patentability criteria. As a result, India remained on the Priority Watch List in the 2021 Special 301 Report of the USTR. IPR continues to be one of the most long standing and contentious issue between India and the US. US has also issues with government procurement, weak intellectual property (IP) protection and enforcement, restrictions on FDI in the retail industry etc. The US has also concerns with regards to the gap between WTO bound rates and MFN applied rates in India that allows significant flexibility to alter tariff rates at any time, which creates uncertainty for the US exporters. The average Most-Favoured-Nation (MFN) applied tariff rate in India is 17.6 per cent - 14.1 per cent non-agriculture products and 38.8 per cent agricultural products - which is highest among major economies. USTR, 2021, highlights that exporters from the US face a number of tariff and non-tariff barriers that impede the US exports and market access to India. Unpredictable regulatory requirements and restrictive digital trade measures are also an issue. Some of the key issues for India include the withdrawal of trade preferences given to India under the GSP programme, removal of India from the US’s list of ‘developing countries’, high import tariffs on steel and aluminium and visa restrictions that particularly hamper the exports of services, especially the IT-BPO services. India’s total trade with US ($146 billion) is less than one quarter of the US-China trade ($615 billion) in 2020. However, the current level of economic engagement falls behind the potential. In 2019-20, the FDI equity inflow from the US to India was $4.2 billion which is 34.5 per cent higher than previous year and is also the highest annual inflows during the last two decades. The US is the fifth largest source of FDI for the country (DPIIT, 2020) with $30.42 billion inflows during April 2000-June 2020. Although the services trade balance continues to remain in India’s favour, the US’s services exports - mostly travel, transport and intellectual property - to India have grown faster than its services imports from India in the recent years. Indo-US trade in commercial services increased at a CAGR of 6.4 per cent and reaching $54.1 billion from $42.2 billion from 2015 to 2019 (USTR, 2020). India’s exports and imports with the US grew at CAGRs of 7.7 per cent and 14.3 per cent respectively compared to 5.1 per cent and 5.2 per cent growth of India’s global exports and imports between 20. Despite the uncertain policy environment such as discontinuing the trade policy forum, delisting from Generalised System of Preferences (GSP) programme, the India-US bilateral merchandise trade has witnessed robust growth, faster than its trade with rest of the world. The US was India’s leading trade partner and export market in 2019-20. As per the USTR (2020), India is the 9th largest trading partner in goods for the US. ![]()
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