US asks India to lower import tariffs to enhance ties

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Namrata Kath Hazarika | 27 Mar, 2012
US Commerce Secretary John Bryson Monday asked India to lower “too high” import tariffs on American goods in order to boost ties between both the nations.

“With trade and investment, it is clear that we have great opportunities. But I would be remiss not to mention that barriers still exist to building our economic relationship. There are many tariffs on American products that are still too high,” Bryson, who is is leading a 16-member business delegation to New Delhi, Jaipur and Mumbai, said at a FICCI event meeting in New Delhi.

He added, “If India is not able to readily access U.S. products or attract strategic investments from U.S. businesses, our progress together could slow down. In the long-term, this could cause significant harm.”

“We must work to foster greater fairness and a more level playing field for all of our businesses,” he said.

Mentioning further on the high import tariffs, which on reduction can spur growth between both the nations, he added, “Capital goods such as power-generating equipment face a basic duty of 7.5% and an effective rate of 22% when taxes are added. Some medical products also have a 7.5% rate. Grapes, citrus, and other fruits face a 30% duty.”

“Also, we are concerned about measures that interfere with U.S. sourcing decisions in areas like IT, electronics and solar energy. This makes it harder to invest in India,” Bryson also pointed out.

He expressed that India should build on its efforts to support more accountability, transparency, and integrity in its commercial actions.

“US exports to India have grown from less than $4 billion in 2001 to over $21 billion last year. And America has reciprocated. The U.S. – an exceptionally open market – imported $36 billion in goods from India in 2011,” he mentioned.

“While, we must remain vigilant to ensure strong and balanced trade growth, it is clear that we are on a path that is mutually beneficial for each of our economies,” he said.

Apart from that, he said, India should join the World Trade Organisation (WTO) Government Procurement Agreement (GPA). “Allow more competition by joining WTO agreement on government procurement”, he said.

Currently, India is an observer of the GPA which deals with the issues relating to government purchases.

In 2010-11, the bilateral trade stood at $45.6 billion. During April-January (2011-12), the US invested $913 million in India.