India seeks reciprocity in its trade deals
India seeks reciprocity in its trade deals

India seeks reciprocity in its trade deals

India has resisted pressure on opening up certain areas while the US and Europe are not equally forthcoming, with reciprocity being its mantra on global dealings. Consider this: An Indian company operating in the US will have to pay additional visa fees of $4,000-4,500 for some H1B and L1 visa applications, according to the Consolidated Appropriations Act 2016 that was signed into law by President Barrack Obama in December last year. Then, a new bill introduced in the US House of Representatives by two lawmakers proposes to recast these two visa programs to make it more difficult for companies to hire Indians. Thousands of skilled Indians travel to the US and work there on these visas. This is impacting the competitiveness of Indian IT majors such as Wipro, TCS and Infosys, among others. And even as the US tightens norms on Indian professionals accessing the US job market, it seeks, without any reciprocity, greater access to the vast Indian market for its poultry exports. It also places stiff hurdles in the path of Indian pharmaceutical exports and has dragged India to the WTO over domestic content requirements in solar cells and solar modules. This last challenge could severely impact Prime Minister Narendra Modi's ambitious project to generate 100 GW of solar power in this country by 2022. The scenario is just as bad with the European Union. Of the 23 cases pending against India at the WTO, as many as 10 have been filed by the EU and another six by the US. The EU has challenged Indian patent laws that prevent ever-greening of patents - a process of tinkering with the composition of drugs going off patent to indefinitely extend the life of the expiring patents - by European drug companies. This change, if it comes about, will sound the death knell for Indian pharma companies that supply cheap generic versions of expensive drugs to India and large parts of the world.

Then, it also wants unfettered access to the Indian market for its auto and liquor industries as well as for its agricultural products without in any way providing reciprocal access to Indian products to its markets.

We have also made it public that we may approach the WTO on increase in visa fees as this could be viewed as a non-tariff barrier. This is against the spirit of free trade practices on the movement of personnel.-Nirmala Sitharaman, Indian commerce minister
The Indian government, quite naturally, has stood firm in its resolve not to give in to this pressure, resulting in howls of protests from commentators in the Western media. Further, another magnet for Indian migration, the UK has been pulling up its drawbridge for Indian talent. The country traditionally draws thousands of Indian students who go there for higher and vocational studies and then work there. Revised UK laws have made it practically impossible for Indian students to work in the UK after completing their studies. The government has taken note of all these developments and is engaging with all stakeholders to resolve the issues. Indian commerce minister Nirmala Sitharaman told IGB in an exclusive interview: “Much before Brexit, I'd gone to the UK and met the immigration minister on the high visa charges and other (restrictive) immigration policies. Our High Commissioner to the UK brought up the issue of the UK denying work permits to Indian students who graduate from British universities as was the case earlier. That condition may continue for some time. But now, post-Brexit, we hope our boys and girls will get better access to British universities and better conditions for students following their studies.” India has also taken up the issue of rising protectionism in the US, as well as the new restrictive visa regime, with the appropriate authorities in that country. “We have discussed the visa-related matter with the US Trade Representative and US Commerce Secretary. We have also made it public that we may approach the WTO on increase in visa fees as this could be viewed as a non-tariff barrier. This is against the spirit of free trade practices on the movement of personnel,” Sitharaman said. It is also clear why the West wants greater access to Indian markets. This country is the world's fastest growing economy and its 300 million-strong middle class represents a market that no country in the world can ignore. Since the West is reeling under a sticky slowdown/recession, there is limited domestic demand in those countries. Thus, Western companies need new markets to sell their products in. At the same time, these countries, grappling with heightened levels of unemployment, are restricting the access of Indian companies to protect domestic industry and jobs. The Indian government is, therefore, calibrating the access it provides to foreign companies based on the principle of reciprocity. “India is a large market. We have a large middle class with substantial purchasing power. This makes India a very attractive market for anyone negotiating with us. At the same time, we also have a large number of people who are poor. The government has to keep their interests in mind,” Sitharaman told IGB. “Then, there are sectors such as automobiles, auto components and pharmaceuticals, to name only three, in which India is globally competitive and in which our companies have earned global acclaim. When we negotiate trade deals, we have ensure that our partner country gives us as much access in these and other sectors such as services as we give them. There has to be a spirit of give and take when working out the details and we have to make sure we get a good deal that protects our national interest,” she added.
United States 6 cases Patent protection for pharmaceutical and agricultural chemical products
Quantitative restrictions on imports of agricultural, textile and industrial products
Measures affecting trade and investment in the motor vehicles sector
Additional and extra-additional duties on imports from the United States
Measures concerning the importation of certain agricultural products
Certain measures relating to solar cells and solar modules
Canada 1 case Quantitative restrictions on imports of agricultural, textile and industrial products
European Union 10 cases Patent protection for pharmaceutical and agricultural chemical products
Quantitative restrictions on imports of agricultural, textile and industrial products
Measures affecting export of certain commodities
Measures affecting the automotive sector
Import restrictions allegedly maintained by India under its Export and Import Policy
Measures affecting customs duties
Import restrictions maintained under the export and import policy 2002-2007
Anti-dumping measures on imports of certain products from the European Communities
Measures affecting the importation and sale of wines and spirits from the European Communities. Authority for panel lapsed on 17 July 2008
Certain taxes and other measures on imported wines and spirits
Switzerland 1 case Quantitative restrictions on imports of agricultural, textile and industrial products
Bangladesh 1 case Anti-dumping measure on imports of batteries from Bangladesh
China 2 cases Anti-dumping measures on certain products from the separate customs territory of Taiwan, Penghu, Kinmen and Matsu
Anti-Dumping Duties on USB Flash Drives from the separate customs territory of Taiwan, Penghu, Kinmen and Matsu
Australia 1 case Quantitative restrictions on imports of agricultural, textile and industrial products
New Zealand 1 case Quantitative restrictions on imports of agricultural, textile and industrial products
Total 23
United States 9 cases Measures affecting imports of women's and girls' wool coats
Measures affecting imports of woven wool shirts and blouses from India
Import prohibition of certain shrimp and shrimp products
Anti-dumping and countervailing measures on steel plates from India
Continued dumping and Subsidy Offset Act of 2000
Rules of origin for textiles and apparel products
Customs bond directive for merchandise subject to anti-dumping/countervailing Duties
Countervailing measures on certain hot-rolled carbon steel flat products from India
Measures Concerning Non-Immigrant Visas
Brazil 1 case Anti-dumping duties on jute bags from India
Argentina 1 case Measures affecting the import of pharmaceutical products
South Africa 1 case Anti-dumping duties on certain pharmaceutical products from India
European Union 7 cases Restrictions on certain import duties on rice
Anti-dumping investigations regarding unbleached cotton fabrics from India
Anti-dumping duties on imports of cotton-type bed linen from India
Conditions for the granting of tariff preferences to developing countries
Anti-dumping duties on certain flat rolled iron or non-alloy steel products from India
Expiry reviews of anti-dumping and countervailing duties imposed on imports of PET from India
Seizure of generic drugs in transit
Poland 1 case Import regime for automobiles
Turkey 2 cases Restrictions on imports of textile and clothing products
Safeguard measures on imports of cotton yarn (other than sewing thread)
Total 22
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