India, US must utilise Pompeo's visit to resolve trade frictions: USIBC

Pompeo's visit comes shortly after India announced a hike in customs duties on as many as 28 US products

India and the US must utilise the upcoming visit of US Secretary of State Michael Pompeo to resolve outstanding "trade frictions", a top American business advocacy group said Sunday.

The US-India Business Council (USIBC) also said tariffs, forced localisation of data and other barriers to trade limit economic opportunities and adversely impact consumers in both the countries.

"We believe that a transparent and consultative dialogue between the governments and industry is needed to resolve outstanding commercial issues, build trust and confidence, and strengthen the broad-based and strategic partnership between our countries," the USIBC said.

Pompeo will be visiting India from June 25-27. His visit comes shortly after India announced a hike in customs duties on as many as 28 US products, including almond, pulses and walnut, in response to higher tariffs imposed by Washington on Indian products like steel and aluminium.

The move will hurt American exporters of these 28 items as they will have to pay higher duties, making those items costlier in the Indian market.

The US had in March last year imposed 25 per cent tariff on steel and a 10 per cent import duty on aluminium products. Earlier, there was no duty on these goods.

As India is one of the major exporters of these items to the US, the move has revenue implication of about $240 million on domestic steel and aluminium products.

However, the US has said it has no plans to impose caps on the H-1B work visas for nations that force foreign companies to store data locally, according to a state department official who said the Trump administration's review of worker visa programmes is "completely separate" from the ongoing discussions with India over the free flow of data.

The state department spokesperson's remarks came after reports emerged that the US had told India it was considering capping the H-1B visas at 10-15 per cent for countries that had a data localisation policy.

The USIBC said it urges both the governments to use Pompeo's visit as an opportunity for dialogue focused on resolving outstanding trade frictions.

"As part of the US Chamber of Commerce, we continue to emphasize our longstanding view that tariffs, forced localization of data and other barriers to trade limit economic opportunities in India and the United States.

"With a new Indian government in place, we are at a pivotal moment for the US and India to reach agreement on some longstanding trade and commercial issues," it said.

The H-1B visa is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require theoretical or technical expertise.