The Hill: Frustration with India mounts

By Vicki Needham

Business groups are expressing growing frustration about India’s lack of progress toward removing trade and economic barriers and opening the country’s markets to U.S. exports.

The National Association of Manufacturers (NAM) and U.S. Chamber of Commerce are among the groups calling on India Prime Minister Narendra Modi to make concrete policy changes, including lowering tariffs and ramping up intellectual property rights protections, ahead of his trip to the United States next month.

Linda Dempsey, vice president of international economic affairs for NAM, said that while discussions between India and the United States have resumed since Modi took office two years ago have been largely positive, his efforts to deliver on promises to remove long-standing trade barriers have fallen far short.

“India’s actions have not kept pace at all with the rhetoric,” Dempsey said.

“I don’t think him coming to Washington and saying the same words and not following up with action is going to go over well with U.S. businesses.”

Modi will address a joint session of Congress during his June visit.

Dempsey argued that the U.S. and India should have a mature relationship and that trade barriers can’t merely be swept under the rug, especially when they hamper the ability of U.S. manufacturers to invest and preserve jobs.

“The economic commercial piece has to be a full part of the discussion and a full part of solution,” she said.

When Modi took office two years ago, he declared that India was “open for business,” a message that was warmly received in Washington.

U.S. firms were cautiously optimistic at the time that the Indian government would begin to overhaul its economy, starting with changes to the nation’s intellectual property framework aimed at spurring a more innovative economy that Modi said he envisioned.

But in the two years since Modi took office, little has changed, business groups say.

Patrick Kilbride, the executive director of international intellectual property for the Chamber’s Global Intellectual Property Center (GIPC), highlighted that India has regularly been a poor performer on intellectual property (IP) protections relative to the rest of the world.

“There is disappointment in the slow pace of political change during the Modi administration,” Kilbride said.

“I’m hopeful the upcoming visit will be a vehicle to relaunch the Modi’s administration commitment to IP,” he said.

Kilbride said the thrust of his group’s outreach is aimed at convincing India that implementing an intellectual property infrastructure is crucial for attracting foreign investors.

But India remains near the bottom of the GIPC’s intellectual property index and was kept on a priority watch list released last week by the Office of the U.S. Trade Representative.

The Alliance for Fair Trade with India, of which NAM and GIPC serve as co-chairs, said India’s inadequate trade secret protection, copyright piracy and concerns about compulsory licensing for biopharmaceutical and environmental technology is keeping the nation at the bottom of the pile.

Hopes were raised in September when the Indian government released guidelines that would provide enhanced protections for computer software patents. But the government followed up earlier this year with a policy that essentially revoked the whole plan, Kilbride said.

Kilbride said he expects Modi to meet with business leaders during his trip to Washington. In those meetings, there is likely to be considerable pressure for his administration to change course.

India is in the final stages of reviewing a national policy on intellectual property that will likely fall short of what is needed, “but it will be a step in a right direction,” Kilbride said.

On Monday, NAM released a set of priorities outlining specific steps the U.S. and Indian governments should take to ensure productive outcomes.

Specifically, NAM recommends four priority areas for discussion on commercial issues through the U.S. India Strategic & Commercial Dialogue and the U.S.-India Trade Policy Forum: tariffs and trade facilitation, forced localization, intellectual property and investment/ease of doing business.

Overall, U.S. goods exports to India face an average applied tariff of more than 13 percent, more than six times higher than U.S. duties on Indian goods.

NAM said the United States should urge India to immediately eliminate any tariffs on products covered by the Information Technology Agreement as well as on products such as textiles and autos.

NAM also is encouraging both governments to strengthen further private sector participation in these formal talks between the nations now that a level of trust has been built up between the governments.

The group said the model would be similar to the U.S.-China Joint Commission on Commerce and Trade (JCCT), which includes a variety of working groups.

“Concrete and sustained progress is needed to address these troublesome issues that undermine the ability of manufacturers in the United States to forge a more robust commercial relationship with India,” NAM President Jay Timmons wrote in a letter to senior administration officials.