Trump administration: US exports to India continue to face barriers

The Trump administration said that US exports to India continue to face barriers as its customs officials generally require extensive documentation, leading to frequent and lengthy processing delays.

The US Trade Representative said in its annual report that despite the Indian government's efforts to pursue economic reforms, the structure of India's customs tariff and fees system are "complex and characterised by a lack of transparency" in determining net effective rates of customs tariffs, excise duties, and other duties and charges.

Trump administration: US exports to India continue to face barriers
Photo courtesy: governancetoday.in

Noting that US exporters have raised concerns regarding India's application of customs valuation criteria to import transactions, it said India's customs officials generally require extensive documentation, inhibiting the free flow of trade and leading to frequent and lengthy processing delays.

This is a consequence of India's complex tariff structure, including the provision of multiple exemptions, which vary according to the product, user, or intended use, it said.

India, it said, lacks an overarching government procurement policy and, as a result, its government procurement practices and procedures vary among the states, between the states and the central government, and among different ministries within the central government.

In its annual 2017 National Trade Estimate, the first under US President Donald Trump, the US goods and trade deficit with India was USD24.3 billion, a 4.2 per cent increase (USD970 million) over last year, the USTR said.

US President Donald Trump
US President Donald Trump. Photo courtesy: slate.com

The report came hours before Trump was expected to sign an executive order instructing his administration to examine the cause of trade imbalances with over 15 countries, including China and India.

According to the report, US goods exports to India were USD21.7 billion, up 1.1 percent (USD237 million) from the previous year. Corresponding US imports from India were USD46.0 billion, up 2.7 per cent.

India was the US’ 18th largest goods export market last year, the report said.

On the other hand, US exports of services to India were an estimated USD18.1 billion in 2015, according to latest data available, and US imports were USD24.7 billion.

Sales of services in India by majority US-owned affiliates were USD22.7 billion in 2014 (latest data available), while sales of services in the US by majority India-owned firms were USD13.4 billion, it said.

Further, the US Foreign Direct Investment in India (stock) was USD28.3 billion in 2015 (latest data available), a 4.4 percent increase from 2014. The US FDI in India is led by professional, scientific and technical services, manufacturing, and wholesale trade, the USTR said.

Taking note of the national goods and services tax, the report said it would replace most indirect taxes, including various charges on imports. The GST is designed to simplify the movement of goods within India, it said.

India intends to implement GST by July, the report said.

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Garima Kapil
Garima Kapil – Senior Writer

Garima Kapil has around five years of experience in the field of writing and editing. Specialised in writing, performing proof-reading and text editing functions along with content ideation; she has worked with leading e-commerce and as a freelancer. She writes on lifestyle, news, telecom, travel, education, healthcare, immigration, along with other subjects required as a full-time writer and freelancer. 

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