India & United States Issued a Joint Statement on Trade Policy

Minister of Commerce and Industry of India Ms. Nirmala Sitharaman and U.S. Trade Representative Ambassador Michael Froman met in Delhi on October 20, 2016, for the tenth ministerial-level meeting of the India and United States Trade Policy Forum (TPF).

NEW DELHI: The Ministers agreed that the TPF has greatly strengthened U.S. - India engagement on bilateral trade and has increased trade and enhanced the overall economic relationship. In addition to the High Level Working Group on Intellectual Property and the Manufacturing Dialogue that Prime Minister Modi and President Obama launched under the TPF, the Forum has gained momentum with regular Ministerial meetings in 2014, 2015 and 2016, supported by inter-ministerial work of established working groups on agriculture, trade in services and trade in goods, promoting investment in manufacturing, and intellectual property. During this time period the Ministers acknowledged that India issued a National Intellectual Property Policy, liberalized foreign direct investment (FDI) in various sectors, and reduced customs processing time, and that the United States ratified the Defend Trade Secrets Act, and advanced implementation of its single window.

While welcoming the success of the TPF to date, and that two-way bilateral goods and services trade reached $109 billion in 2015, the Ministersrecognized that for economies of their size, a great deal of potential remains. Both sides agreed to continue their efforts for exploring possibilities for opening up the markets as well as expand share of existing trade to each other’s territory.

Sharing a desire to increase bilateral trade in goods and services, the two governments reviewed substantive progress achieved in deepening bilateral trade and investment in 2016, and discussed planned engagement for 2017 which can further promote economic growth and job creation in both India and the United States.  Minister Sitharaman and Ambassador Froman discussed and exchanged views on a range of trade and investment issues, in particular, (i) Agriculture, (ii) Trade in Services and Trade in Goods, (iii)Promoting Investment in Manufacturing, and (iv) Intellectual Property.  The co-chairs of the respective Work Sessions briefed Minister Sitharaman and Ambassador Froman on the outcomes of their discussions and presented agreed upon work plans for continued engagement in these areas in 2017. The Minister and the U.S. Trade Representative also discussed the status of Indian and U.S. trade agreements with other countries and ways to ensure that bilateral trade and investment between India and the United States can continue to grow.

Both countries noted the importance attached to the TPF by Prime Minister Modi and President Obama, and its potential to increase bilateral trade and investment in a manner that supports economic growth, development, and job creation.

Agriculture

India and the United States acknowledged the benefits to Indian and U.S. farmers and agri-businesses that could accrue from increased bilateral engagement. Both countries agreed to continue working to facilitate bilateral trade in food and agricultural products and committed to holding technical dialogues on animal health, plant health, and food issues during 2017. India and the United States reviewed the results of the technical dialogues that took place in 2016.

Both countries recognize the need to establish science- and risk-based regulations and procedures that are based on international standards and guidelines set by CODEX Alimentarius, the World Organization for Animal Health (OIE), and the International Plant Protection Convention (IPPC), and agreed to address this important topic in technical dialogues and other forums.  Both countries also agreed to share best practices between their Sanitary and Phytosanitary (SPS) Enquiry points. The United States acknowledged India's suggestion to work towards conformity based assessment system and mutual recognition systems for food products to facilitate exports.

Minister Sitharaman and Ambassador Froman noted each other’s requests and agreed to follow up on exploring the possibility of enhanced market access on identified agricultural products. Both sides welcomed India’s increased shipments of mangoes and pomegranates to the United States in 2016.The United States agreed to a timely review of the information submitted by export of grapes from India. Subsequent to the receipt of additional information from the United States, India agreed for a timely review of the request for export of U.S. cherries and alfalfa hay. The United States also agreed to further collaboration to facilitate Indian rice and honey exports. India acknowledged the receipt of the U.S. proposal on Certificate for Pork Exports to India and Form 9060-5 recently submitted and agreed for a quick examination of the request. Discussion of mandatory package size requirements for pre-packaged foods for some items in India will continue in 2017.

The United States and India discussed regulation relating to end-use information for boric acid, imported and domestic, used for non-insecticidal purposes. Both sides agreed to discuss U.S. concerns regarding market access for dairy products. U.S. concerns on GM and licensing issues were noted by India.

The Ministers discussed recommendations in India’s February 2016 Economic Survey concerning agricultural reforms.  Given the countries’ mutual interest in boosting farmer income and ensuring consumer welfare, both sides agreed to deepen collaboration on best practices that can benefit both farmers and consumers.

Trade in Services and Trade in Goods

Minister Sitharaman and Ambassador Froman highlighted the important role of the services sector in India and the United States, and the significant potential for increasing bilateral services trade and investment.  To advance this goal, India and the United States discussed efforts to promote foreign investment in key services sectors. Both sides stressed the need to explore policy measures that would facilitate enhanced mutual ties in service sectors. Both countries reviewed technical engagement that took place in 2016.

The importance of e-commerce, retail and direct selling in facilitating trade in goods was acknowledged by both sides. India noted that 100 percent foreign direct investment (FDI) is now permitted in the marketplace model of e-commerce as well as in the distribution of food products produced in India, including through e-commerce. To ensure that e-commerce companies can take full advantage of this market opening, India noted the continuous efforts for facilitating investment in e-commerce. Ambassador Froman welcomed the publication of the “Advisory to State Governments/Union Territories on Model Guidelines on Direct Selling”. The United States encouraged India to consider relaxing local sourcing requirements in single brand retail trade. India mentioned recent FDI reforms providing relaxation in local sourcing norms in specific cases.

Both countries recognized that legal, financial, information technology, and accountancy services can be assets to Indian and U.S. companies and can facilitate growth in   trade and investment. Both countries agreed to continue discussion of promoting liberalization in these sectors.

Both countries acknowledged the successful organisation of the India-US Workshop on Traditional Medicine in March, 2016. Ongoing dialogue and cooperation in the field of Traditional Medicine was noted. Both countries took note of the progress towards signing of an MoU between the Department of AYUSH and the Department of Health and Human Services on collaboration in various aspects of traditional medicine including regulatory and capacity building.

Both sides agreed to explore mechanisms through technical discussions to address market access issues and trade costs for pharmaceutical products and medical devices in a manner that benefits patients and provides healthcare services and products.

The United States and India also decided to continue their engagement on visa issues, and their shared resolve to facilitate the movement of professionals, experts, and scientific personnel in to the respective countries.  The two countries acknowledged the ongoing discussions on totalisation and resolved to continue their engagement on the elements required in both countries in order to pursue a bilateral Totalisation Agreement.

On the issue of ownership and control in the insurance sector India’s policy objective of retaining the ownership with Indian companies was explained. On the Insurance Regulation and Development Authority of India (IRDAI) exposure draft on public listing in the insurance sector, India invited the United States to offer comments on the draft guidelines relating to public listing.

Both countries noted India’s focus on expanding higher education and training goals contained in Prime Minister Modi’s Skill India campaign and the initiative that the Skill India Mission has done to promote cooperation with foreign community colleges.  They welcomed recent plans to permit greater collaboration with foreign educational institutions.

Recognizing the strong digital economy in both countries, which includes robust information, communication and technology sectors as well as the broad cross-section of services and goods suppliers that benefit from digital trade, Minister Sitharaman and Ambassador Froman reiterated their commitment to the G-20 Digital Economy Development and Cooperation Initiative.  They pledged to deepen bilateral engagement in 2017 to promote the digital economy through a free and open internet, and to explore the adoption of joint principles that ensure that the Internet remains open to the free exchange of ideas, goods, and services. Both countries also agreed to further the Digital Agenda of the two sides as adopted in the India – US Information Communication and Technology (ICT) Working Group held on 27th September, 2016 in New Delhi.

India and the United States praised the Trade Facilitation Workshop convened during October 17-18, 2016 in Delhi, welcoming the cooperation between industry and the two governments in exchanging best practices and advancing efforts to achieve full implementation of the WTO Trade Facilitation Agreement.  India and the United States discussed their efforts to increase transparency through publication, expedite the movement of goods through customs processes, reduce documentation, and improve supply chain connectivity through “single window” clearance systems that will benefit all manufacturing activities in both countries.  They looked forward to greater cooperation to promote entry into force of the WTO Agreement and third country implementation that will benefit regional trade in Asia and globally.

Both countries noted each other’s requests and agreed to follow up on exploring the possibility of enhanced market access in services and goods sectors.

 Intellectual Property

Minister Sitharaman and Ambassador Froman welcomed the enhanced engagement on intellectual property rights (IPR) under the High Level Working Group on Intellectual Property, and reaffirmed their commitment to use this dialogue to continue to make concrete progress on IPR issues.  They praised the engagement on intellectual property (IP) and reviewed the results of the dialogues on copyrights, trade secrets, patents, genetic resources, traditional knowledge and the Traditional Knowledge Digital Library (TKDL), standard essential patents and IP policies that took place in 2016.  Both countries emphasized the role of robust and balanced IPR protection in fostering creativity, promoting innovation, and attracting investment, taking into account the interests of all stakeholders, including the public. Minister Sitharaman and Ambassador Froman reiterated the goal of ensuring the poorest populations in India and the United States have access to quality healthcare, and recognised the important role that trade, intellectual property and innovation policies play in enhancing access to quality health and affordable medicines for the public at large.

Ambassador Froman welcomed India’s on-going efforts to reduce pendency and strengthen the IP regime in India through its National IPR Policy and other measures like increasing technical manpower and streamlining procedures. He praised the Government of India’s consideration of a broad range of viewpoints in drafting the National IPR Policy, and urged a transparent notice and comment process to implement and evaluate the Policy. Minister Sitharaman reiterated India’s resolve to bring down pendency in patent and trademark applications, for which various concrete steps like augmentation of technical manpower and simplification of patent procedures have already been taken. She also emphasized that the Policy is being implemented through various actionable points to foster creativity and innovation in the country.

Recognizing the shared interest of the most robust entertainment industries in the world to promote and protect their artistic and creative content, both countries praised the intensified cooperation on copyright in 2016, including the workshop on copyright policies and implementation held in Washington in April and agreed to continue deeper engagement on copyrights, including holding a follow-on workshop in India in 2017. Ambassador Froman also welcomed DIPP’s new role in copyright administration. Minister Sitharaman reiterated the importance of the Copyright Board and expressed hope that it would be functional by the second quarter of 2017. Both countries voiced concern about the unauthorized recording, including camcording, of films in cinemas and copyright piracy on websites. India highlighted positive reforms relating to anti-camcording measures proposed in forthcoming amendments to the existing Indian Cinematograph Act. Both sides noted proactive steps initiated at the Indian state level to combat piracy.

The Ministers also commended the trade secrets workshop convened with government officials, academics, legal experts and representatives from U.S. and Indian industry in Delhi in 2016 that facilitated the exchange of information and best practices on trade secrets protection in both countries. The United States highlighted the May 2016 ratification of the Defend Trade Secrets Act in the United States, which, along with the Economic Espionage Act, provide federal causes of action for both civil and criminal enforcement against trade secrets misappropriation. India noted that it protects trade secrets through a common law approach. Ambassador Froman and Minister Sitharaman were appreciative of the full exchange of views by participants and the identification of next steps in this regard. They reiterated their commitment to strong protection of trade secrets in their respective countries and to continue engagement on effective trade secret protection mechanisms. A toolkit would be prepared for industry, especially SMEs, to highlight applicable laws and policies that may enable them to protect their trade secrets in India. A training module for judicial academies on trade secrets may also be considered. A further study on various legal approaches to protection of trade secrets will also be undertaken by India.

With respect to the patent regime, both sides affirmed the importance of transparency, predictability, speed, clarity and streamlining of procedures and will continue to have discussions and share best practices to promote these goals.

Minister Sitharaman appreciated the United States for the use of the Indian Traditional Knowledge Digital Library (TKDL) in patent search examination. Both sides agreed to continue cooperation on use of TKDL.

With respect to computer-related inventions (CRI), Minister Sitharaman noted that India has set up a Committee to re-examine the guidelines on examination of CRI patent applications, and expressed hope that a final decision would be taken soon in this regard consistent with Indian law.

The healthy discussions in 2016 helped provide greater transparency and deeper understanding of IPR issues in both countries, and lay the foundation for further work in 2017. Both sides reaffirmed the need to continue the exchange of best practices and information on issues being discussed, as well as other issues of interest including Geographical Indications and trade.

Promoting Investment in Manufacturing

Minister Sitharaman and Ambassador Froman noted efforts that each country is undertaking to promote the ease of doing business in order to create an environment conducive to entrepreneurs and attract investment in manufacturing.  Both countries stressed the importance of providing a transparent and predictable policy environment and simplified compliances to help attract investments in manufacturing.

The Ministers reaffirmed their commitment to exchange information on standards, Conformity Assessment procedures and the Common Criteria Recognition Arrangement (CCRA) in the electronics sector.

India and the United States also agreed to continue their dialogue on conformity assessment based on international standard systems across various sectors by respective regulators.

The Ministers underlined the importance of transparency and predictability in the formulation of new rules, and agreed to continue sharing best practices and information on appropriate public stakeholder consultations before framing of laws or policies, including further information on the U.S. Administrative Procedure Act.

Both countries emphasized that the timely resolution of disputes through a strong judicial system fosters an attractive investment climate and improves the ease of doing business.  The United States welcomed India’s establishment of commercial courts, streamlining of its arbitration procedures, and its ongoing efforts for timely resolution of commercial disputes.

Both sides agreed that creating a transparent, predictable and open business environment that reduces administrative burden and protects innovation is essential for attracting investment, promoting manufacturing activity, and providing the confidence necessary for businesses to bring new technologies across borders.  They emphasized their commitment to facilitate efforts to exchange best practices among industry and government.

Both countries expressed their desire to implement reforms that promote the ease of doing business and attract investment in manufacturing, emphasizing the benefits of policies that facilitate open market production and sourcing decisions.

Both countries also took note of the recommendations by the U.S.-India CEO Forum held in August, 2016 and expressed their desire to take appropriate action on these recommendations.

Next Steps

In conclusion, Minister Sitharaman and Ambassador Froman expressed satisfaction with the discussions held during the tenth round of the TPF and reiterated their mutual commitment to strengthening bilateral cooperation in trade and investment.  Ambassador Froman thanked Minister Sitharaman for hosting the tenth round of the TPF in Delhi.  They proposed to convene the eleventh round of the TPF in the United States in 2017.