|
|
|
'Make in India' epitomises challenges to trade relationship: US
|
|
|
|
Top Stories |
|
|
|
|
SME Times News Bureau | 06 Apr, 2021
The United States has said that the recent Indian emphasis on import
substitution through a "Make in India" campaign has epitomised the
challenges facing the bilateral trade relationship.
These comments are part of the "2021 Trade Policy Agenda and 2020 Annual Report" released by the US Trade Representative.
As
per the document, during 2020, the United States continued its
engagement with India to try to resolve longstanding market access
impediments affecting U.S. exporters.
"While India's large
market, economic growth, and progress towards development make it an
essential market for many U.S. exporters, a general and consistent trend
of trade-restrictive policies have inhibited the potential of the
bilateral trade relationship," the document said.
It said the
recent Indian emphasis on import substitution through a "Make in India"
campaign has epitomised the challenges facing the bilateral trade
relationship.
Effective June 5, 2019, the United States
terminated India's eligibility under the Generalized System of
Preferences (GSP) programme, following a review of concerns related to
India's compliance with the GSP market access criterion.
Subsequent
to the suspension of India's GSP benefits, the United States and India
resumed intensive work in the fall of 2019 aimed at producing a package
of meaningful market access outcomes, and this engagement continued
throughout 2020.
U.S. objectives in this negotiation included
resolution of various non-tariff barriers, targeted reduction of certain
Indian tariffs, and other market access improvements.
The
United States also engaged with India on an ongoing basis throughout
2020 in response to specific concerns affecting the full range of
pressing bilateral trade issues, including intellectual property (IP)
protection and enforcement, policy development affecting electronic
commerce and digital trade, and market access for agricultural and
non-agricultural goods and services, the document said.
In March
2020, India adopted a two per cent DST. The tax only applies to
non-resident companies, and covers online sales of goods and services
to, or aimed at, persons in India. The tax applies to companies with
annual revenues in excess of approximately Rs. 20 million (approximately
$267,000).
The tax went into effect on April 1, 2020. On June
2, 2020, the U.S. Trade Representative initiated a Section 301
investigation of India's DST. On the same day, the USTR requested
consultations with the government of India. The investigation's notice
of initiation invited public comments on issues covered by the
investigation. The investigation is ongoing.
The Office of the
United States Trade Representative (USTR) has sought written comments
regarding a potential trade action in connection with the Section 301
investigation of India's Digital Services Tax (DST).
India has
adopted a DST that imposes a two per cent tax on revenue generated from a
broad range of digital services offered in India, including digital
platform services, digital content sales, digital sales of a company's
own goods, data-related services, software-as-a-service, and several
other categories of digital services. India's DST only applies to
"non-resident" companies.
On January 6, 2021, based on the
information obtained during the investigation and the advice of the
Section 301 Committee, the U.S. Trade Representative determined that
India's DST is unreasonable or discriminatory and burdens or restricts
U.S. commerce, and therefore is actionable under sections 301(b) and
304(a) of the Trade Act, USTR said.
Pursuant to sections 301(b)
and (c), USTR proposes that the U.S. Trade Representative should
determine that the action is appropriate and that appropriate action
would include the imposition of additional ad valorem tariffs on certain
products of India.
In particular, USTR proposes to impose
additional tariffs of up to 25 per cent ad valorem on an aggregate level
of trade that would collect duties on goods of India in the range of
the amount of DST that India is expected to collect from U.S. companies.
Initial
estimates indicate that the value of the DST payable by U.S.-based
company groups to India will be up to approximately $55 million per
year.
|
|
|
|
|
|
|
|
|
|
|
|
|
Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
|
|
Daily Poll |
|
|
PM Modi's recent US visit to redefine India-US bilateral relations |
|
|
|
|
|
Commented Stories |
|
|
|
|
|
|
|
|