Key Trade Issues

Key Trade Issues of Contention With India

India’s trade barriers harm U.S. exports and jobs. For instance, if India leveled the playing field and matched U.S. standards on tariffs, investment and intellectual property (IP), U.S. exports to India would rise by two-thirds, according to a 2014 U.S. International Trade Commission report.

India’s trade barriers are not going away. India took some meaningful steps in 2017 to improve its overall intellectual property environment. Still, U.S. companies face numerousbarriers to trade and investment in India, especially with respect to IP protection; in some areas, such as medical devices, the problems have distinctly gotten worse. These include:

➢ New price controls targeting medical devices and agricultural biotechnology that have caused some leading American companies to withdraw advanced products.

➢ Increased pressure on U.S. companies to localize manufacturing across a diverse set of sectors – including medical devices, pharmaceuticals, solar energy equipment, and capital goods/

➢ Bans on imports of American dairy products.

➢ Efforts to revoke or deny patents for globally accepted lifesaving medicines and new seed technologies. Compulsory licenses and weak patent enforcement given Indian companies unfair advantages.

➢ Tariffs above 100 percent on autos, motorcycles, textiles, distilled spirits, and other products — plus new tariffs on information technology products – undercut U.S. competitiveness.

➢ Burdensome testing and safety requirements on telecommunications equipment that are counter to global norms and likely violate India’s international obligations.

It isn’t just U.S. industry that suffers – India’s trade barriers also harm its own growth.

➢ High tariffs and other barriers limit consumer choice and restrict Indian manufacturers’ access to American goods that provide critical inputs.

➢ Localization policies raise costs and limit choice for Indian companies, shielding them from global competition and partnerships that would equip them to innovate and grow.

➢ Weak IP protection and active undermining of some patents and copyrights hamper India’s efforts to become or remaina global leader in innovative industries — including agriculture, biopharmaceuticals, movies, and music.

Some Indian trade barriers violate India’s commitments as a member of the World Trade Organization (WTO) and other key agreements.

➢ Indian tariffs on certain telecommunications equipment violate commitments to provide these products duty-free treatment as a signatory to the Information Technology Agreement (ITA).

➢ India’s Patents Act remains inconsistent with Article 27.1 of the WTO Agreement on Trade-Related Aspects of Intellectual Property (TRIPS), which requires regulatory data protection. This remains a problem despite Prime Minister Modi’s statement that he has asked his government to align its patent laws with international standards, as well as government claims that India’s IP laws comply fully with international obligations.

➢ India maintains subsidies for exports and agriculture despite the fact that both appear to violate WTO rules and are subject to ongoing dispute settlement.