News

The Alliance for Fair Trade with India (“AFTI”) recently outlined the diverse and costly array of major trade barriers American exporters face when trying to enter the Indian market. AFTI provided comments to the Office of the United States Trade Representative (“USTR”) for its 2020 National Trade Estimate Report (“NTE Report”), and also highlighted important but limited progress India made in 2019 to open its markets.

Highlights in AFTI’s comments include:

Intellectual Property Rights

Overall, India maintains weak protection of intellectual property rights, including a lack of patent enforcement and a general failure to protect copyrights, which allows for widespread theft of American products. For example, legal and regulatory systems pose barriers at every step of the patent process for biopharmaceutical applicants, in particular, including narrow patentability standards in India’s Patents Act and onerous patent application disclosure requirements. Patent approvals are often not transparent or coordinated between federal and state agencies.

Progress made: Notably, in February 2019, India’s Cabinet approved anti-camcording provisions in its Cinematographic Amendment Bill.  AFTI was also very pleased to India’s Supreme Court overturning a lower court decision that blocked a patent on GM cotton seeds.

Tariffs

Compared to other Asian countries in similar stages of development, import duties in India are still very high. Year over year, India has continued to raise tariffs to protect its domestic commercial interests and discriminate against imports. In fact, in each Union Budget since Prime Minister Modi entered office in 2014, India has increased tariffs across multiple sectors, including processed foods, electronics, auto parts, footwear, and furniture.

Price Controls

India continues to levy harmful price controls on the medical device, pharmaceutical, and agricultural biotechnology industries.

Forced Localization

A series of deeply concerning forced localization measures continue to limit access for U.S. industries to the Indian market, including tariffs on IP-intensive products. AFTI’s NTE comments have pointed out year after year, that pursuing forced localization for commercial measures rather than national security purposes violates India’s international obligations.

Discriminatory and Duplicative Testing Requirements

U.S. companies in India across an array of sectors continue to face a range of testing and certification requirements that are duplicative of costly tests American exporters undertake in internationally accredited labs.

New Barriers to U.S. Investment: For medical devices, India began requiring mandatory certification by the Bureau of Indian Standards (BIS) for surgical blades, surgical gloves, and other medical devices. Several of the BIS standards referenced are outdated and in one case would require deviation from that international standard.

Mandatory Beverage Alcohol Standards and Labeling Requirements

On April 1, 2019, new problematic mandatory beverage alcohol standards and labeling requirements went into effect, including failing to provide explicit protection for Bourbon and Tennessee Whiskey as distinctive products of the United States.

Market Access

India is one of the largest dairy markets in the world and continues to maintain unscientific requirements for dairy imports and has refused extensive good-faith efforts to restore trade in dairy products between the United States and India. AFTI’s comments made to the USTR on the NTE report in 2019 note that “solving the dairy certificate issue would not establish fully open dairy trade with India, but would increase annual U.S. dairy exports by up to $100 million, depending on the scope of the resolution.”

Conclusion
Despite taking some meaningful steps forward in 2018-2019, including India’s Supreme Court overturning an earlier decision that blocked a patent on GM cotton seeds and tentative progress on anti-camcording provisions, India’s trade barriers are not going away and continue to penalize American exports and foreign investment.