Want to Add Billions to U.S. Exports? Eliminate Discriminatory Barriers and Boost IP Protection in India
By: Chris Moore, Senior Director for International Business Policy at the National Association of Manufacturers
If India removed discriminatory barriers and improved intellectual property protection, U.S. exports to that country would rise by two-thirds (the equivalent of $14.4 billion, based on 2013 data) and U.S. investment would roughly double. That’s the stunning conclusion of a U.S. International Trade Commission (ITC)study out today on the impact of India’s trade, investment and industrial policies on the U.S. economy.
The ITC’s results confirm what manufacturers have long known – India’s unfair policies increasingly are harming U.S. exports of a wide array of products, costing jobs and growth in both countries. The results provide a powerful roadmap for change as U.S. and Indian officials continue to work toward stronger bilateral commercial ties through the U.S.-India Trade Policy Forum and the High-Level Working Group on Intellectual Property.
The study, requested last year by the House Ways and Means and Senate Finance Committees and based on economic modeling and an extensive survey of 8,000 companies, found that India’s policies – including high tariffs, investment restrictions, forced localization requirements, weak IP protection and other non-tariff barriers – have “become more burdensome between 2007 and 2013.”
In a separate statement, the Chairmen and Ranking Members of the Ways and Means and Finance Committees expressed continuing concern about “barriers identified in the ITC’s report that undermine a market-based path to development for India and diminish opportunities for U.S. workers and businesses. They urged “the Indian government to address these significant areas of concern” and “work to strengthen our economic relationship.”
Overall, the ITC determined that more than a quarter of U.S. businesses surveyed are “substantially adversely affected by restrictive Indian policies,” with manufacturing, agriculture and financial services among the sectors most harmed. More than half the firms polled believe India’s policies are discriminatory and “adversely affect their own firm more than Indian companies.”
These discriminatory policies are not only damaging exports and jobs in the United States, but also harming India’s economy. The ITC found that “[m]ost U.S. companies engaged in India that face regulatory impediments have made one or more changes in their business strategy since 2007” – including reducing resources devoted to the Indian market.
Businesses in the United States and around the world are urging the government of Prime Minister Narendra Modi to change India’s policies and make trade and investment a two-way street. Will India take action that leads to concrete progress and real results? Manufacturers will have a chance to weigh in next year during the course of a second ITC investigation of India’s policies since mid-2014.