India to press US on non-tariff trade barriers

NEW DELHI: India will hold a fresh round of discussions with the US in the New Year on protectionist measures being taken by Washington in the backdrop of the global economic slowdown.

Measures such as the proposed withdrawal of tax breaks for companies that outsource to countries like India and various non-tariff barriers imposed on imports in the form of stringent quality standards will be in focus. The issues will be taken up by commerce minister Anand Sharma during his visit to the US in early 2010, a commerce department official has said.

“Although the US is one of our largest trading partners, our ties could deepen if the country eases some of the non-tariff protection it accords to its industry,” a commerce department official, who requested not to be named, told.

While some of the issues were touched upon during US trade representative Ron Kirk’s visit to New Delhi in October, India is expected to hold detailed discussions and look for solutions during Mr Sharma’s visit.

India’s merchandise exports to the US fell 19.48% from $21.9 billion during the period January-October 2008 to $17.67 billion in the corresponding period of 2009. The slowdown also had an impact on India’s imports from the country, although the fall in imports was much lower at 9.56 %, from $ 15.45 billion during January-October 2008 to $13.98 billion in the corresponding period of 2009.

Although US President Barack Obama’s proposal to curb tax breaks for companies outsourcing from the US will not directly impact trade in goods, India does not want the Bill to be passed as it would discourage US firms, that provide jobs in India, to continue their operations or set up new ones.

India has taken up the issue of tax breaks for outsourcing firms officially with the US. The minister’s visit would be used as an occasion to reiterate the point, the official said.

The minister will also discuss various non-tariff barriers, such as product characteristic requirements, marking requirements and labelling requirements, imposed on imports which make the process of selling goods to the US extremely tough.

Many sectors such as agriculture, textiles, chemicals, pharmaceuticals, seafood and automobiles have been complaining about the barriers being faced by them in the US.