Trade deficit with India dropped to $22.9bn in 2017: US
The trade deficit between India and the US had dropped by 5.9% ($ 1.4bn) to $22.9bn in 2017 as compared to the previous year, said the National Trade Estimate 2018 released by the US Trade Representative (USTR). India is one of the few countries with which the US's trade deficit has decreased in the last one year. Here are more details.
US goods exports to India were $25.7bn
The US's goods exports to India were $25.7bn, up 18.7% ($4bn) from the previous year. The corresponding US imports from India were $48.6bn, up 5.6%. India was the US's 15th largest goods export market in 2017, the annual report said.
US exports of services to India were $23.1bn in 2017
The United States' exports of services to India were an estimated $23.1bn in 2017 while the US's imports were $28.7bn, the annual report said. Sales of services in India by the majority US-owned affiliates were $24.5bn in 2015 (latest data available), while sales of services in the United States by the majority India-owned firms were $14.7bn, the voluminous report said.
US FDI in India (stock) was $32.9bn in 2016
The US foreign direct investment (FDI) in India (stock) was $32.9bn in 2016 (latest data available), a 10% increase from 2015. US direct investment in India is led by professional, scientific, and technology services, manufacturing, and wholesale trade, it said. However, the Trump administration continued to harp India on a number of issues, including market access, high tariff, and protection of intellectual property.
India implemented price controls on coronary stents and knee implants
"In 2017, India implemented price controls on coronary stents and knee implants that do not fully differentiate for advanced technologies within a product class," the report said. National US companies applied to withdraw technologically-advanced products from the market, but the requests have been rejected, forcing the US to sell certain products at a loss. India may apply similar price controls on additional medical devices.
India maintains some of the highest average tariff rates globally
According to National Trade Estimate, India continues to maintain some of the highest average tariff rates worldwide. The large gap between India's WTO bound and applied tariff rates allows India to make frequent adjustments to the level of protection provided to domestic producers by modifying tariff rates, it said. For example, in 2017 India increased tariffs on pulses from zero to 30%-50%.
India raised tariffs on high-tech information and communication technology
India also raised tariffs on certain high-tech information and communication technology products from zero to between 10% and 20%. The US companies have raised significant concerns with these actions, the report alleged. "The United States continues to raise these concerns through bilateral engagement with the Indian government, including through the US-India Trade Policy Forum," the US Trade Representative said.
US seeks bilateral and multilateral opportunities to open India's market
The US has actively sought bilateral and multilateral opportunities to open India's market, and the Government of India has pursued ongoing economic reform efforts. Nevertheless, US exporters continue to encounter tariff and non-tariff barriers that impede imports of US products into India, the report said.
High tariffs prevent market access for US milk to India
The report said India continues to require that dairy products be derived from animals which have never consumed any feeds containing internal organs, blood meal, or tissues of ruminant origin. India has explained that its position is based on religious and cultural grounds. This requirement, along with high-tariff rates, continues to prevent market access for US milk and dairy product exports to India.
US proposed a labeling solution for its dairy products
"In order to address India's religious and cultural concerns, in 2015, the US proposed a labeling solution to allow for consumer choice between dairy products derived from animals that have or have not consumed feeds with ruminant protein," USTR said. India has so far rejected that proposal, and the US continues to press India to provide access to its dairy market, the report claimed.
US raised concerns about India's SPS-related trade restrictions
The US, the report said, has raised concerns about India's sanitary and phytosanitary (SPS)-related trade restrictions in bilateral and multilateral forums including the TPF, the WTO SPS Committee, and Codex. According to the report, the US continues to work with India to open market access for US poultry products into India consistent with the WTO ruling. Until then, the US considers the dispute unresolved.
