India refutes US allegations of trade barriers

05 April 2014

India has rubbished a recent report released by the United States Trade Representative office stating that the US is facing a number of trade barriers in the telecommunication sector from India and China.

USTR office has released a report blaming India and China for putting up significant tariff and non-tariff barriers that restrict exports of US products.

Refuting the findings of the USTR report, the commerce ministry said India's policies related to tariffs, imports, government procurement, export subsidies and intellectual property protection are consistent with its international and bilateral obligations.

According to the USTR report, released early this month, the "pronounced disparity" between the bound tariff and the applied tariff in India acts as a trade barrier as it leads to flexibility and uncertainty in tariff determination.

The commerce ministry, however, stated that the actual duty in India tended to be lower than the bound duty as the country has continuously been reducing tariff levels.

''This position reflects a lack of understanding of the international commitments and the policy space countries have to implement tariff policies. India has been unilaterally reducing its tariff over the years which is why the applied tariffs are much lower than the WTO-mandated bound rates. India implements its tariff policy well within its multilateral commitments and is committed to further liberalisation based on the multilateral negotiations,'' a commerce ministry official said.

The USTR report also refers to alleged barriers in major services industries like insurance, banking, audiovisual services, accounting, legal services, telecommunications, distribution services, postal and express delivery services.

The regulatory regime in these sectors is based on India's national interest and is in accordance with the commitments of India under General Agreement on Trade in Services (GATS), the commerce ministry official said.

On the contrary, the official said, India views with serious concern the steep hike in visa fees by the US, which has implications for US's obligations under the WTO. India believes that further liberalisation of the services sector would be possible on a multilateral basis rather than on plurilateral efforts advocated by the US.

He said India's intellectual property regime and decisions based on the national legal framework are in consonance with its obligations under the global intellectual property agreement TRIPS.

''The recent decision of the Supreme Court rejecting the patent plea in the Novartis case has reiterated that India's interpretation of Section 3(d) of the Indian Patent Act has balanced its public health interests with that of innovation,'' the official said.

On the US allegation that the government procurement system in India is not transparent, the official said that both the India follows well laid out rules and procedures which are transparent and audited, adding that a public procurement bill has been under active consideration of Parliament.

''Since India is not a signatory to the WTO Government Procurement Agreement, many of the obligations that the report seeks to attribute to India are misplaced. India exercises its procurement policy in consonance with its perception of national interests and policy prerogatives. They neither violate any international agreement nor bilateral commitment,'' the official said.

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