US-India trade groups cautions Washington against anti-India steps

In the midst of a virtual trade war against India, a key US trade group is cautioning Washington to avoid unnecessary steps that would threaten US-India relations and a shared, vibrant knowledge economy.

India's size, economic prominence, geopolitical influence and shared values with America make it an indispensable ally, US-India Business Council (USIBC) President Ron Somers argues in a testimony for a bipartsan US fact finding body.

Therefore any and all policy discussions about India should operate from that understanding, he says in his brief for the US International Trade Commission (ITC) hearing on "Trade, Investment, and Industrial Policies in India: Effects on the US Economy."

Somers, executive head of the trade group comprised of nearly 350 of America's and India's top companies dedicated to enhancing the US-India commercial relationship, "will call on both countries to overcome challenges and strengthen their partnership," USIBC said.

"This will pave the way for the world's two largest free-market democracies to shape the destiny of the 21st Century - for the better," he said.

Somers is scheduled to appear before the commission Thursday, but a massive winter storm is likely to delay the hearing by a day.

With a population of 1.24 billion people, more than half under the age of 25, India is poised "to become the world's largest consumer market," Somers will note, USIBC said.

These facts, coupled with the growth of India's middle-class present "an extremely lucrative market for American goods and services."

Since President George W. Bush visited India in 2006, two-way trade has grown from approximately $25 billion to more than $100 billion today, USIBC noted. The growth of India's civil aviation industry has been a major boon for US manufacturers.

"Entire fleets of India's new private aviation industry rely wholly on US exports and content, creating literally hundreds of thousands of jobs here in the United States," Somers will testify.

India's commitment to democracy, especially in a troubled region of the world, means that America should embrace the relationship even when there are the inevitable disagreements on government policies, USIBC said.

At the same time, USIBC chief also suggested that India should take a number of steps to boost trade and give the US better access to India's economy.

Such steps include improving infrastructure and creating a regulatory environment that rewards and protects intellectual property.

"These and other issues can and must be resolved through ongoing cooperation and dialogue," Somers said.

"Similarly, the United States must avoid unnecessary steps that would threaten US-India relations and a shared, vibrant knowledge economy," Somers cautioned.

The USITC is conducting the investigation at the request of the Senate Committee on Finance and the House Committee on Ways and Means. The Commission will deliver its report to the Committees by Nov 30.

The two day US ITC hearing into India's allegedly discriminatory policies against US trade and investments that began Wednesday follows a series of apparently concerted moves against India.

On Monday the US Trade Representative (USTR) dragged India to the World Trade Organization (WTO) to challenge India's domestic content requirements in Phase II of India's National Solar Mission ("NSM").

Last Week, US Chamber of Commerce asked the USTR to designate India a Priority Foreign Country "in order to strengthen engagement with India to address the rapidly deteriorating intellectual property environment in this market."

A couple of weeks ago the chamber's Global Intellectual Property Centre (GIPC) index put India at the bottom among 25 countries, on protection for intellectual property environment.