Hopes Modi will carry out discussed reforms
U.S. Commerce Secretary had told Prime Minister Narendra Modi in early May that the U.S. Trade Representative (USTR) would hold off on making a final decision on India’s eligibility for the Generalized System of Preferences (GSP) programme until after the general election. Mr. Ross had also discussed reforms with the Prime Minister and hoped Mr. Modi would follow through on those.
While it would hold off on making a final decision until after the elections, the USTR’s “substantive concerns” needed to be addressed to avoid a negative decision, Mr. Ross had told Mr. Modi.
“They were not addressed unfortunately.” Mr. Ross told delegates at the U.S.-India Business Council India Ideas Summit in Washington on Thursday.
India’s eligibility for the GSP programme was withdrawn earlier this month because, as per U.S. President Donald Trump, India had not provided adequate assurances to the U.S. on “equitable and reasonable” market access.
“While there I spent an hour with Prime Minister Modi, a week before the election results were finalised. I hope that now that he has received this strong re-election mandate, he will carry through on the reforms he and I discussed,” Mr. Ross said of his visit to New Delhi in early May, as part of the Trade Winds Business Forum and Mission.
He drew comparisons between the U.S. and India’s levels of trade protection, saying the U.S. was the least protectionist among major countries and had a trade deficit to prove it.
“The U.S. has zero tariffs on 61% of the total value of our total import,” Mr. Ross said. “India’s average applied tariff rate at 13.8% remains the highest of any major world economy.” Mr. Ross went on to cite examples of high Indian tariff rates, including in autos, alcoholic beverages and motorcycles, reiterating some of the public messaging he had delivered in New Delhi.
Mr. Ross said the U.S. is India’s largest export destination, while India remained the U.S.’s 13th largest export market despite its large population and this imbalance is “due importantly to overly restrictive market access barriers.”
Mr Ross, a billionaire, listed some of the concerns and opportunities he was aware of as an investor in India, earlier in his career. (Mr Ross, his private equity firm and another investor held 37.7% of SpiceJet to Kalanithi Maran in 2010). His list comprised tariff and non-tariff barriers, e-commerce rules, data localisation restrictions, price controls on medical devices and pharmaceuticals, tariffs on ICT products.
“These barriers, some of which, unhappily, are relatively new, impede the development of viable, commercial relationships,” Mr. Ross said, calling for greater predictability, transparency and consistency in the regulatory framework. He also noted, however, that India had made progress in the World Bank’s Ease of Doing Business report.
Mr. Ross said he intends to visit India again in the “near future”.
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