U.S. Trade Report Calls ‘Make In India’ Policy As “Trade Restrictive”

The U.S. tried to resolve “long-standing market access impediments affecting U.S. exporters” with India during 2020, says the 2021 President’s Trade Agenda and 2020 Annual Report — an annual report submitted by the U.S. Trade Representative (USTR) to Congress. The report terms India’s policies “trade-restrictive” and saying the “Make in India” campaign epitomises the challenges to the trade relationship.

“While India’s large market, economic growth, and progress towards development make it an essential market for many U.S. exporters, a general and consistent trend of trade-restrictive policies have inhibited the potential of the bilateral trade relationship. Recent Indian emphasis on import substitution through a “Make in India” campaign has epitomized the challenges facing the bilateral trade relationship,” the report says. The Make in India campaign was launched by Prime Minister Modi in 2014 to incentivise production in India.

The report describes the Trump administration’s revocation of India’s preferential trading status under the Generalised System of Preferences (GSP) program in June 2019 and the ensuing discussion to achieve a mini trade deal (“package”) throughout 2020.

“U.S. objectives in this negotiation included resolution of various non-tariff barriers, targeted reduction of certain Indian tariffs, and other market access improvements. The United States also engaged with India on an ongoing basis throughout 2020 in response to specific concerns affecting the full range of pressing bilateral trade issues, including intellectual property (IP) protection and enforcement, policy development affecting electronic commerce and digital trade, and market access for agricultural and non-agricultural goods and services,” the report said.

These issues remain unresolved, leaving inconclusive, negotiations that lasted until close to the end of the Trump administration.

In a country-wise section on Digital Service Tax (DST), a Section 301 investigation on India’s DST, which began in June last year, is highlighted. The investigation is ongoing, as per the report.

India finds a total of 179 mentions in the report which is over 300 pages long. Many of the mentions are in a chapter on trade enforcement activities — describing disputes brought by the U.S. at the World Trade Organization (WTO).