India pushes for greater market access for agri goods at Indo-US trade meet

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India has pushed for greater market access for agricultural export, as well as institutional mechanisms to improve food export, at the India-US Trade Policy Forum (TPF) on Thursday.

Problems faced by Indian exporters of mangoes, basmati rice and grapes due to unwarranted requirements and restrictions were raised, commerce and industry minister Nirmala Sitharaman told the press, after delegation-level talks with United States Trade Representative Michael Froman.

That country’s Generic Drug User Fee Act (GDUFA) and Food Safety Modernisation Act have created an elaborate system of inspection and high inspection fees, affecting smaller exporters, she added.

Bilateral trade is $109 billion a year. Both sides wish to increase this to $500 bn. Foreign direct investment from the US was $4.2 billion in 2015-16, up from $806 million in 2013-14.

The Government of India’s (GOI’s) concerns on the US Totalisation Act were also discussed. GOI says it discriminates against Indian workers in the US, who lose their social security contributions due to discrepancy in the visa and social security regime rules. GOI wants early conclusion of a totalisation agreement to protect the interest of professionals of Indian origin. The US has signed such a pact with several nations, with the aim of avoiding double taxation on income with respect to social security taxes.

The issue of increase in visa fee and reduction in the number of available H1B and L1 visas, proposed by US lawmakers, was also discussed. GOI says it will adversely affect the Indian information technology sector.

“In 2014-15, as much as 69 per cent of all H1B visas and 30 per cent of L1 visas were issued to Indians,” US commerce secretary Penny Pritzker had earlier said.

On Intellectual Property Rights (IPR), GOI has maintained Indian laws comply with World Trade Organization norms. The US has raised concerns over the patents regime, particularly in pharmaceuticals. On trade secrets, the US wants a separate law.

Later in the day, USTR officials are said to have met Finance Minister Arun Jaitley. The meeting was attended by senior officials who deal with issues related to Bilateral Investment Treaties (BITs). Such BITs are expected to eventually replace the existing bilateral investment protection and promotion agreements the GOI has signed with 72 nations.

“There will be no backtracking of any prominent BIT clause from our side. The clauses, as part of the model BIT, have been approved by the cabinet. We will not water down any clause,” said an official.

He added that negotiations with the US had slowed because of the elections there. Sitharaman said India was waiting for a reply by the US on the issue. The model BIT states India or any other country cannot nationalise or expropriate any asset of a foreign company unless the law is followed, is done for public purpose and fair compensation paid. Public purpose is not defined in any treaty India has signed with other nations. The model BIT says dispute resolution tribunals, including foreign ones, can question “public purpose” and re-examine a legal issue settled by Indian judicial bodies.

Other nations have reservations about the BIT allowing foreign companies and related aggrieved parties to seek international arbitration only after exhausting all domestic redressal options