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 New Delhi is furious about a threat of trade sanctions made by the
U.S. Trade Representative's (USTR) office over its protection of
intellectual property rights (IPR), preference for domestic
producers and non-trade barriers.
Ahead of a general election, Prime Minister Manmohan Singh's
government does not want to be seen as bowing to U.S. pressure, amid
lingering tension over the recent arrest and strip search of a
female diplomat in New York suspected of visa fraud.
On Wednesday, the National Association of Manufacturers (NAM) — which represents about 50 U.S. business groups — asked the USTR to
designate India a Priority Foreign Country in its 2014 report.
"This designation appropriately would rank India among the very
worst violators of intellectual property rights and establish a
process leading to concrete solutions," NAM said in a letter to U.S.
Trade Representative Michael Froman.
The USTR is holding public hearings for its annual report due in
April. The report will provide details on nations denying protection
of IP rights or fair market access to U.S. firms.
India is widely perceived in Washington as a serial trade offender,
with U.S. firms unhappy about imports of everything from shrimp to
steel pipes they say threaten jobs, as well as a lack of fair access
to the Indian market for its goods.
WTO CASES
This month, Washington said it was filing its second case at the WTO
over domestic content requirements in India's solar program, which
aims to ease energy shortages in Asia's third-largest economy.
There are 14 past or current WTO cases between India and the United
States, whose bilateral trade in goods measured $63.7 billion last
year, not including the latest case.
India has since hardened its stance, instructing officials not to
entertain any request from the United States International Trade
Commission (USITC) — a quasi-judicial federal agency — to examine
its trade practices.
India's trade ministry has also "advised" U.S. Deputy Trade
Representative Wendy Cutler to put off a visit to India that had
been scheduled for late March due to the parliamentary election due
in April or May, a senior official told Reuters.
The official said India had asked for alternative dates for the
visit, possibly after the elections, adding that the decision was
not linked with the trade tension.
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WORST OFFENDERS
The USTR listed in a February 12 report markets in Delhi, Mumbai and
Hyderabad as being among the worst offenders globally for the sale
of pirated software and counterfeit goods.
A visit by the USITC delegation to meet officials from the Indian
commerce, industry, health, telecom and finance ministries has also
been put on hold.
A USITC spokeswoman confirmed the delay, saying they were looking
for "other windows" for a visit, but declined to comment on the
reasons for the delay.
Newly appointed Trade Secretary Rajeev Kher, who pushed India's
stand on food security issues at a WTO meeting in Bali, as chief WTO
negotiator, has told his officials to tackle bilateral trade
disputes preferably through multi-lateral forums.
India has also urged President Barack Obama's administration not to
fall prey to special interest groups and consider trade issues in
the context of the wider economic and strategic relationship between
the two countries.
Officials say any move towards putting India on a priority foreign
countries list would hurt bilateral relations.
"There are clear stresses in the India-US trade, economic
relations," said another government official who, like others who
spoke to Reuters, declined to be identified due to the sensitivity
of the matter.
"If it is a strategic relationship, they should be looking at the
larger picture."
(Additional reporting by Krista Hughes in Washington, Frank Jack
Daniel in New Delhi; editing by Douglas Busvine and Robert Birsel)
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