US seeks removal of trade, tax barriers in India

The NAM advised the US to work with India on removal of commercial and taxation barriers.

The Dollar Business Bureau 

The US’ manufacturing body on Monday advised the American government to work with India on removal of commercial, taxation and policy barriers, in order to help the American companies scale up their investments in the Indian market.

The US-based National Association of Manufacturers (NAM) released a new priority document that charted out certain steps, if taken and subsequently achieved, will bring major breakthroughs towards addressing the key commercial barriers that the American manufactures have long faced in India.    

The announcement comes against the background of Prime Minister Narendra Modi’s upcoming visit to Washington in June this year. The NAM said the prime minister’s forthcoming visit and his dialogues and engagements with the American leaders would serve as an opportunity to ensure productive change and progress on these long standing issues.

On Monday, the NAM wrote a letter to Commerce Secretary Penny Pritzker and US Trade Representative Michael Froman, in which it listed a set of deliverables to be pushed with the Indian government.

The US’s largest manufacturing body said high tariffs and other trade barriers and policies in India continue to hinder trade growth for many manufacturing sectors. A cumbersome customs processing and import licensing procedures further contribute to the country’s limited trade growth.

“For example, overall US goods exports to India face an average applied tariff of more than 13% – over six times higher than US duties on Indian goods. Such tariffs not only impede manufacturers in the United States, but India’s own industries that seek to use inputs and participate in global supply chains,” the NAM said in a statement.

Citing India’s growing economy with its increasing household incomes and a burgeoning middle class, the NAM said the country’s exponential growth rate has given a great opportunity to expand the stagnant US-India trade and investment relationship.

India is currently the world’s fastest growing large economy, considerably ahead of its neighbor China. The World Bank has ranked it as the world’s third largest economy in terms of purchasing power parity (PPP), ahead of Japan.

Referring to Modi’s ambitious Make in India campaign to make the country a manufacturing powerhouse, the body said India and the US need to expedite their discussions on key economic and commercial barriers to realise their bilateral dream.

“Since that date (May 2014), the US and Indian governments have restarted and expanded their commercial dialogue, including two critical forums to discuss economic and commercial issues – the US-India Strategic & Commercial Dialogue (S&CD) and the US-India Trade Policy Forum (TPF),” it said.

 

The Dollar Business Bureau - May 03, 2016 12:00 IST
 
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