US-India trade, e-commerce disputes likely to top Pompeo's India agenda


Business Standard
June 25, 2019


US-India trade, e-commerce disputes likely to top Pompeo's India agenda

Pompeo is expected to lay the ground for a meeting between US President Donald Trump and Indian Prime Minister Narendra Modi later in the week at a G20 meeting in Japan.

US Secretary of State Mike Pompeo will visit India from Tuesday for talks with government leaders over a growing list of trade and investment issues that has cast a shadow over ties between the two big democracies.

Pompeo is expected to lay the ground for a meeting between US President Donald Trump and Indian Prime Minister Narendra Modi later in the week at a G20 meeting in Japan.

Media reports also said terrorism, Afghanistan,de-escalation of the Persian Gulf crisis, the Indo-Pacific, Iran, trade issues, and growing bilateral defence ties will be the focus of discussions between the Indian government and Mike Pompeo.

Both countries are trying to promote domestic manufacturing.

Under a "Make in India" campaign, Modi has been courting foreign investors. Trump has pushed for U.S. manufacturing to return home as part of his "Make America Great Again" campaign.


American companies have concerns about market access and the lack of a level playing field in important sectors and the recent Indian government measures such as increasing tariffs on a range of products, restricting e-commerce operation and limiting the free flow of data are particularly problematic, not just for US companies but for Indian companies and their long-term competitiveness.

The two countries also have differences over Russian arms sales to India and U.S. sanctions on China's Huawei Technologies Co Ltd.

Bilateral trade between India and US has almost touched $150 billion and there has been a growth every year in the last few years, Kumar said, adding there has been a seven-fold increase since 2001.

"There are 500 US companies operating in India. The contribution of Indian-Americans in the growth of US has been recognized by the US leadership. US has supported India for the permanent member of the (UN) Security Council. Last year, we held a two-plus-two dialogue (between Foreign and Defence Ministers). There is lot of cooperation going on in the high technology trade. So, there is plenty of action going on between India and US bilateral relationship."

With Pompeo's visit, people in the policy circles are keeping a close watch on the likely developments in trade front.

Pompeo, in his address during the India Ideas Summit of US-India Business Council on June 12, stated that trade barriers and data localisation requirements are issues of major concern in their trade engagement with India.

TARIFFS, CLOSED MARKETS

India this month imposed higher tariffs on 28 US products including almonds, apples and walnuts, following the US withdrawal of certain trade privileges for India.

Last year, India had announced tariffs in retaliation to higher U.S. import duties on steel and aluminium.

Trump has called India "tariff king", and pointed to 50% duties on Harley Davidson motorbikes as an example. The Trump administration has also asked India to remove price caps on imported U.S. medical devices, open up its dairy market and cut duties on IT products.

DATA LOCALISATION, E-COMMERCE

India has mandated foreign firms to store their payments data locally, hurting companies such as Mastercard and Visa.

The United States has been pushing for data flow across borders in several countries including India. This week, India has been alarmed at the possibility of caps on H-1B work visas that allow thousands of skilled Indians to work in the United States, as retaliation for its data localisation drive. The State Department, though, has said there were no such plans.

India outlined a new draft policy for its e-commerce sector this year, focusing on data localisation, improved privacy safeguards and measures to combat the sale of counterfeit products.

Tighter e-commerce foreign investment rules implemented in India in February have forced Amazon.com Inc and Walmart Inc to rework their business strategies in the country. Walmart last year invested $16 billion in Indian online retailer Flipkart.

HUAWEI

The United States has put China's Huawei on an export blacklist citing national security issues, barring U.S. suppliers from selling to the world's largest telecommunications equipment maker and second-biggest maker of smartphones, without special approval.

It is asking its allies to adopt shared security and policy measures that will make it more difficult for Huawei to dominate 5G telecommunications networks. India has not decided whether to invite the Chinese firm for 5G trials.

RUSSIA'S S-400 MISSILE SYSTEM

The United States has said that India's plan to buy S-400 surface-to-air missile systems from Russia would draw sanctions under its Countering America's Adversaries Through Sanctions law. India, which signed the deal last year, says the weapons are necessary to bolster defences against China.

Link-https://www.business-standard.com/article/economy-policy/us-india-trade-e-commerce-disputes-likely-to-top-pompeo-s-india-agenda-119062401002_1.html

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