Govt plans mechanism to evaluate policies of key trading partners

Written by Arun S | Updated: Sep 1 2014, 06:06am hrs
TradeGovernment is planning to institutionalise and regularise ?general fact-finding investigations.
In a counterblow, New Delhi is planning to institutionalise and regularise general fact-finding investigations into what it believes restrictive American policies discriminating against and detrimental to Indian trade and investment.

Although the trigger are some US policies seen as adverse to India's interests, the idea is to make a permanent arrangement for evaulating the impact of policies of key trading parters on the country's economy.

Official sources told FE that these investigations will be done in an objective manner, largely on the lines of the US International Trade Commission's (USITC) probes.

The plan assumes significance as it comes ahead of PM Narendra Modis visit to the US, slated for the last week of September.

Acting on a request by the House Committee on Ways and Means and the Senate Committee on Finance, the USITC (a federal fact-finding agency that is independent and non-partisan) had decided to focus this year on Indias policies on industry, trade and investment and its impact on the US economy sector-wise. The USITC report is likely by November-end.

The USITC follows an approach involving doing case studies, conducting public hearings, looking into written submissions and carrying out quantitative analysis to finalise its report. However, it does not make any policy recommendations.

Indias approach of looking into US policies will be similar and a permanent arrangement will be made in this regard, the sources said, indicating the establishment of a USITC and Special 301 kind of set-up. There will also be regular editions of such reports of Indian fact-finding agencies so that all obstacles to the country's trade and investment are documented annually and updated, they said. Initiatives will also be taken at the bilateral fora to ensure that the US comes out with corrective measures.

However, they added that similar reports on policies of other countries and their impact on the Indian economy could also be done later by such an Indian agency/agencies.

The sources said that in the interim, New Delhi will continue to rely on industry bodies like Nasscom, Ficci, CII and Assocham, Indian embassy and consulates in the US as well as major think tanks, such as Icrier, for information on US policies impacting Indian economy. Sources pointed at the inputs given by Nasscom and other bodies on US visa policies affecting the IT industry and on the issue of finalising an India-US totalisation agreement (to exempt Indian professionals employed in the US from shelling out taxes on medicare and social security).

Officials also said that, similarly, an internal analysis was done by them (using inputs from various bodies) on the solar policies of all the states in the US and it found that many US states also had domestic content requirements akin to what India has. The solar policy dispute between the US and India is before the WTOs Dispute Settlement Body.

In addition to the USITC reports, officials said Washington has been putting pressure on New Delhi through the Special 301 report on Indias intellectual property rights (IPR) protection and enforcement. The 2014 edition of the Special 301 report released on April had placed India on the Priority Watch List after finding that Indias IPR protection and enforcement environment had deteriorated.

However, since the report was out in April, just ahead of the Indian general election, the US had decided to carry out an Out-of-Cycle Review (OCR) for a constructive engagement with the new government to improve Indias IPR protection and enforcement environment. The OCR is to start after Modis US visit, and then Washington will inform India of the areas where it expects India to make policy changes, the sources said.