US businesses seek solutions with India over trade practices

Business groups said Wednesday they hope an investigation into India's trade practices yields solutions that lead to a stronger economic relationship with the United States.

The National Association of Manufacturers (NAM) and U.S. Chamber of Commerce said Wednesday there is still "deep and and widespread concern" about India’s continued and growing discriminatory actions against a wide array of U.S. sectors, which they say are negatively affecting manufacturing and other industries throughout the United States.

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Linda Dempsey, the NAM's vice president of international economic affairs and co-chairwoman of the Alliance for Fair Trade with India (AFTI), said there is a long list of growing concerns about India's policies that she argued discriminate against U.S. imports.

She said that members of the AFTI want to find solutions and "see an improved and mutually beneficial U.S.-India commercial relationship." 

Businesses and the U.S. government tried to engage again and again at the highest levels, but "unfortunately that engagement has not delivered results," she said.

The lack of dialogue over India's worsening conditions has put a spike in U.S. business confidence to invest in the growing nation.

About six months ago, top lawmakers on the House Ways and Means and Senate Finance committees called for an investigation about how India's trade policies, which include local content restrictions and high tariffs on some products, are affecting the U.S. economy.

Mark Elliot, executive vice president of Global Intellectual Property Center at the Chamber and co-chairman with Dempsey, testified Wednesday at the U.S. International Trade Commission (USITC), which is investigating the concerns.

The investigation is expected to provide Congress with the information it needs to "provide the basis for further actions that address India's unfair policies and lead to concrete solutions," Dempsey said.

"The continued deteriorating of the India IP environment will have far-reaching implications of foreign direct investment, technology transfer and economic growth," Elliot said. 

Recently, the Chamber released its intellectual property protection index report that ranked India last among 25 countries examined, including Russia and China.

"Looking at that report you can see why the business community has so many concerns with India's intellectual property environment," Elliot said. 

Despite the desire of U.S. firms to invest and partner with India, he said the lack of IP protections has "significantly damaged" business confidence in the market. 

"It's bad for investment, bad for innovation and bad for international trade," he said.

During testimony, he said India is failing to rise to the challenge of fixing its practices and is "clearly heading down the wrong path."

On Monday, the U.S. Trade Representative announced another round of consultations with India over requirements for domestic content on imported solar panels.

The Indian government on Tuesday said it planned to respond, Reuters reported. 

"India will respond at the WTO adequately," Trade Minister Anand Sharma said.

"We may also have some issues with them with regard to solar. We may also have an application or may move the WTO."

Stephen Ezell, senior trade policy analyst with the Information Technology and Innovation Foundation, estimated that India’s Preferential Market Access (PMA) program could cost the U.S. economy $1.7 billion and 10,500 jobs annually if it is fully implemented, during testimony on Wednesday.

"Forced localization policies, such as the PMA, harm global supply chains and the international innovation ecosystem, while threatening American jobs and the economy as a whole,” Ezell said.