Washington Times: Stalled progress on U.S.-Indian trade

To-do list for lucrative commerce is still only a wish list

January 12, 2016

Op-ed by Linda Dempsey, Vice President, International Affairs at the National Association of Manufacturers & Mark Elliot, Executive Vice President of the Global Intellectual Property Center at the U.S. Chamber of Commerce, as posted in the Washington Times

High on the wish list of both the Indian and U.S. governments in 2015 were increased trade, jobs and economic growth. This was reflected in a report issued in December 2014 by the U.S. International Trade Commission titled “Trade, Investment, and Industrial Policies in India: Effects on the U.S. Economy. The report highlighted the steps the Indian government could take to make increased trade a reality by improving its business climate, intellectual property and investment policies.

Unfortunately, one year later, the list remains largely the same, as little has changed on the ground to develop the existing $100 billion in bilateral trade to its full potential of $500 billion per year. That potential of a robust trade relationship between our two countries, demonstrated by net increases in jobs and gross domestic product, is yet to be realized.

During the past year, the leaders of both nations, as well as other high-level trade officials, held multiple meetings aimed at implementing a truly bilateral commercial relationship, starting with President Obama’s visit to join India’s Republic Day celebration last January. In September, the two countries held their first ever Strategic and Commercial Dialogue, followed by the U.S.India Trade Policy Forum in late October.

While increased dialogue is a prerequisite to improving trade relations between our two countries, these meetings fell short of concrete outcomes that would have improved India’s business, innovation and investment climate. In fact, the U.S. International Trade Commission’s most recent report, issued in October, looked for changes to the barriers to trade and investment that persist in India and found that Prime Minister Narendra Modi has made little headway on his promise to make it easy to do business in India. The World Bank also found little movement by India in its annual “Doing Business” report, ranking India at No. 130 out of 189 countries, up just four spots from 2014 and still last among G-20 nations.

Foreign investors were hopeful about potential breakthroughs in intellectual property protections in India when the prime minister announced a draft national intellectual property policy and efforts to liberalize foreign direct investment through government reforms. Unfortunately, the draft policy did not go far enough, failing to address substantial counterfeiting and piracy problems and concerns regarding the restrictive patentability standards for pharmaceutical products. India must establish a predictable intellectual property environment reflecting international standards and best practices to attract and sustain innovative industries.

Not only have efforts to open India to foreign investment fallen short, but in some cases, they have even backtracked, particularly with a new model investment treaty that is more limited than India’s current treaties and does not provide the levels of access or protections at the level sought by the United States. Market access for several major manufacturing and research-heavy sectors have narrowed even further as a result of tariffs, expanded requirements for indigenous manufacturing such as local content requirements, and India-unique standards undermine not just manufacturers in the United States, but also India’s own ability to participate more robustly in international trade.

The growing ties between India and the United States over the past year are a positive development, but the lack of progress on the trade front is cause for concern. We must ensure the trade dialogue between India and the United States bears fruit. American industries will continue to work with the U.S. government, the Indian government and our counterparts in India to move our two countries beyond talking to action so that next year’s wish list is shorter, and we can celebrate increased trade and improved prosperity in 2016.

Mark Elliot is executive vice president of the Global Intellectual Property Center at the U.S. Chamber of Commerce. Linda Dempsey is the National Association of Manufacturers’ vice president of international economic affairs. The Global Intellectual Property Center and the National Association of Manufacturers serve as co-chairs of the Alliance for Fair Trade with India.