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High Imports Fees is a Major Hindrance for US and India Trade

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Expressing disappointment at the Indian government‘s decision to increase tariffs on 50 import items, US Consul General in Kolkata Craig Hall said the high tariff baseline made India a “less attractive” destination for American investors.

“The US was disappointed to see India unilaterally increase the tariff rates of 50 line items in this year’s Budget raising a high tariff baseline already higher. This makes India a less attractive destination for US investors,” Hall said in a session organised by the Merchants’ Chamber of Commerce and Industry here.

“The US maintains one of the lowest average applied tariff rates in the world at 3.4 per cent while India’s average applied tariff rate is 13.4 per cent. Almost one half of all tariffed items imported in the US are duty free whereas less than three per cent of goods coming into India qualify for duty free status.”

The envoy expressed concern over market access restrictions of US-based diary and poultry items in India while mentioning that America’s trade deficit of $28 billion with India last year is neither acceptable nor sustainable from the US perspective.

He also said that India has closed its legal system to foreign law firms and the educational sector — US universities are not allowed to establish campuses in India or invest in a meaningful way in joint ventures.

Hall said the US government is also concerned about weak copyrights in India and challenges to patents, particularly in agro-technology and pharma.

“In pharma, the Indian government is setting price ceiling on drugs and medical equipment, which the US sees a violation of IPR.”

He claimed that India also contributes to the overcapacity and subsidy on steel items to an extent along with China and said the overcapacity and subsidy on steel by other countries diminishes America’s steel production base, thereby causing a threat to America’s national security.

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