US think tank seeks suspension of trade benefits to India

The group demanded that Congress should immediately direct the US International Trade Commission to investigate how India's mercantilist policies damage the US economy

Alleging that India's recent trade policies are jeopardising its commercial ties with the US, an American think tank has recommended to the Congress the suspension of trade benefits to New Delhi.

"To be clear, a strong, growing, and collaborative trade relationship between the US and India is in both parties' best interests. But India's recent trade policies are placing that relationship in jeopardy," Stephen Ezell, senior analyst at the Washington-based Information Technology & Innovation Foundation (ITIF), said in a paper released yesterday."The US should not sit idly by as the Indian government enacts regulations that harm American industry and jobs."Strong leadership will be needed from both sides to ensure a continued constructive and robust trade relationship between the two countries," Ezell demanded.

In an abstract of the report 'The Indian Economy at a Crossroads', Ezell said India's innovation mercantilist policies, if not significantly modulated, threaten to inflict harm not only on its own, but also the global economy.

The full report would be released later.

"US government and industry have been engaged in intense dialogue with Indian officials for well over a year towards modifying the PMA, compulsory licensing, and related policies without seeing significant improvement."It's time to add some sticks to the carrots, and Congress and the US government should look at all available options to level the playing field," Ezell said.

He demanded that Congress should immediately direct the US International Trade Commission to investigate how India's mercantilist policies damage the US economy, as it did in 2011 to examine effects of China's intellectual property infringement and indigenous innovation policies.

"Congress should also begin the process of withdrawing India's participation from the Generalised Systems of Preferences (GSP), which provides reduced tariffs for Indian goods entering US markets," it said."In fact, India was the top developing country GSP beneficiary in 2011, with $3.7 billion in imports entering the US duty free, and the country has benefited significantly from the preference," he said.