US Trade Representative Robert Lighthizer on Wednesday said India has "extremely" high tariffs and reducing import duties for certain American goods would help in boosting bilateral trade. Lighthizer also indicated that the change in administration in the US may slow things down with regards to the proposed limited trade deal between the two countries.
"In terms of how long it takes to do a (trade) deal, we have one deal which is on the smaller side, my guess is that we are not that far away from the deal… "…keeping in mind obviously we have a political change going on over here and that is going to be a bit of a setback…there is going to be some change and my guess is that it will slow things up," he said in a virtual chat with T V Narendran, President-Designate, CII.
Lighthizer added that a more comprehensive Indo-US trade deal may take some time. "…my guess is that, that will take a while…that is not going to happen anytime soon. But I think just working on it is helpful," he said, adding negotiations for such agreements are time-consuming. Further, he said trade between the two countries is growing but trade deficit persists with India, which is an issue. While trade has gone up dramatically in the last five-six years, the deficit has not really gone down, he said, adding the deficit (difference between imports and exports) has been about USD 29-30 billion, which is probably "not a good idea".
"I think if you really want to grow that trade…reduce tariffs for the US substantially and in variety of areas…if India cleverly and strategically reduce these tariffs for the US in certain areas, you would see more sales for US in India and that would result in more sales from India to US," he said. He further said India has extremely high tariffs. "The barriers are the same as with other countries and some are unique. India has extremely high tariffs, maybe the highest in the world. We in the US have all our tariffs bound and we are probably at a 3 per cent level. has only about 75 per cent of their tariffs bound and the bound rate is about 50 per cent. "So, it is a very high rate for a country with a USD 2.8 trillion economy. Your effective rates are substantially lower than that but they are still five times ours. So, tariffs are a problem," he added. Other impediments include agriculture and India's "strong bureaucracy", he said. There is a toughness and independence about the bureaucracy which makes reform in some areas more difficult than it probably ought to be, he added.
Asked whether India's move to open up investments makes up for the high tariffs to some extent, Lighthizer said, "No, I don't think it does at all. I think they are total independent things." "I think India has to come to grips… to reduce tariffs on an awful lot of things or you are not going to have the kind of real trade relationships you want with the US and others. "Clearly, there is room for India. It wants to develop its own industry and that is understandable and people have done that historically. But the US cannot have a relationship where one country has tariffs that are five or six times higher than theirs and sometimes 100 per cent versus 2 per cent," he said.
"I am not saying no tariffs on anything. We have to be realistic. We have our own politics, own security issues but right now the single biggest issue you have is very, very high tariffs, higher than developing countries," he added.
Read all the Latest News, Breaking News and Coronavirus News here
Comments
0 comment