Economic Times: India must reduce obstacles to US exports: Donald Trump warns Narendra Modi

Donald Trump has asked India to reduce obstacles, calling for a “fair and reciprocal” trade relationship, as it seeks to step up exports of fuel, including liquefied natural gas, on longterm contracts.

The two countries proposed increased commercial engagement based on the principles of free and fair trade. “To this end, the United States and India plan to undertake a comprehensive review of trade relations with the goal of expediting regulatory processes; ensuring that technology and innovation are appropriately fostered, valued, and protected; and increasing market access in areas such as agriculture, information technology, and manufactured goods and services,” they said in a joint statement.

Although the US is the second-largest exporter to India, after China, its trade deficit with India was $24.3 billion in 2016, a 4.2% increase over 2015.

The US has raised issues with localisation barriers in the energy and information technology sectors, high tariffs and duties in telecom and medical device products and intellectual property policies.

The National Association of Manufacturers, the largest such grouping in the US, has said India has excessively high tariffs on imports of a range of products.

From registration requirements in cosmetics, package size and labelling requirements in food packets, genetically engineered food products to standards on alcoholic beverages, Washington has said that India imposes onerous conditions that negatively affect its exports.

“Moreover, procurement is also being streamlined with the Government e-Marketplace in place,” the official said. Trade experts said some of the US demands are not justified.

“We have serious market access issues for products like wheat. We can’t give them that. The US needs to listen to the market. Most of its demands are unwarranted,” said Biswajit Dhar, professor at JNU.

“There is a market for our professionals there but there they don’t mind manipulating us. They can’t arm-twist us.”

US exports of services to India were an estimated $18.1 billion in 2015 and imports were $24.7 billion. Sales of services in India by majority US-owned affiliates were $22.7 billion in 2014, while sales of services in the US by majority Indiaowned firms were $13.4 billion.

Dhar explained that Chinese products face the same customs procedures but China’s presence in India has increased substantially. “China never complains. The US should look at its production structure and efficiencies,” he added.