US launches probe into India’s trade policies

  • Yashwant Raj, Hindustan Times, Washington
  • Updated: Sep 27, 2014 15:09 IST

Just hours before Prime Minister Narendra Modi landed in America on Friday for a high-profile visit, the US Congress ordered a second probe into India’s trade policies, alleging they were discriminatory.

The powerful Senate finance committee and House Ways and Means committee sought this new probe by the US International Trade Commission in a letter on Thursday.

The commission is to give a report in November 2015.

“Given the recent national elections in India and the formation of a new Bharatiya Janata Party (BJP)-led government, and our interest in receiving the most comprehensive and up-to-date information possible, we now request under … that the Commission conduct a second investigation concerning India’s industrial policies that discriminate against US trade and investment since the first ITC investigation,” said a letter written jointly by the leadership of the Senate finance committee and the House Ways and Means committee.

This time the target is specifically Modi’s BJP government.

This new investigation is in addition to one the independent body is already conducting, to much consternation in New Delhi, with its final report due in November.

The first probe, ordered by the same bodies of the US Congress in August 2013, was to look at, in a statement then issued by the commission, “restrictive trade and investment policies that India maintains or has recently adopted, determine which sectors of the U.S. economy are most affected by these policies, and describe the competitiveness of Indian firms in these sectors”.

And it had come after weeks and months of intense pressure mounted by a section of US private sector, especially pharmaceutical IT companies, on the administration and lawmakers.

India’s trade practices are the subject of another ongoing probe, by the US Trade Representative, which releases an annual Special 301 list of worst offenders from the US point of view.

As a matter of policy, India has not deposed at these hearings. But it has been defended by trade bodies from India and US academics and activists.

A team of USITC investigators wanted to visit India and talk to private sector executives and officials. They were allowed to go, but the government refused to let them speak to officials.

“It is not just embarrassing for us,” said an official requesting anonymity, “but downright unfair — these are our policies and if they have a problem they are welcome to go to WTO”.

India and the US taken each other to the world body over several disputes, with mixed results for both.

The same bodies are back, drumming up the same issue in the light of Prime Minister Modi’s visit. The Alliance for Free Trade with India wrote to US President Barack Obama recently, urging him to press him to press the prime minister on these issues when they meet next week.

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