U.S. Government to Investigate India’s Trade and Investment Restrictions

In response to escalating trade and investment restrictions by the Government of India, the U.S. Senate Committee on Finance and House Committee on Ways and Means have asked the U.S. International Trade Commission (ITC) to investigate the impact of India’s protectionist trade policies on U.S. exports and investments.

Although current trade in goods and services between the United States and India exceeds $90 billion, U.S. exporters and service providers have long faced significant tariff and nontariff barriers in the Indian market.  Examples of India’s restrictive policies include excessive or non-transparent import duties and fees; burdensome customs procedures; localization barriers; technology transfer requirements; and lax intellectual property protection and enforcement, including the questionable issuance of compulsory licenses that harm the U.S. pharmaceutical and biotechnology sectors.

To help investigate these practices, the ITC is seeking written comments from the U.S. business community on Indian practices of concern and will also hold a public hearing.  Comments submitted by interested parties will be studied by the ITC, the United States Trade Representative, the Department of Commerce and Congress, which will give heightened U.S. government attention to addressing and resolving these concerns.

Many U.S. goods and service sectors should be able to enlarge their presence in India if India’s restrictive trade policies are liberalized.  With a gross domestic product of roughly US$4 trillion, India’s economy has enjoyed annual economic growth of between 4.5 percent and 7.4 percent since 2000.  Its size and proximity to the Middle East and East Asia make it an attractive (and challenging) export and investment destination for U.S. companies.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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