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‘Backlash’ possible if tariff barriers not removed: US

PTI - Kolkata

High tariff barriers in India were affecting growth of Indo-US trade resulting in trade deficit in favour of the former, the US consul-general Mr George N Sibley said.

India has one of the highest tariff barriers of 30 per cent as per the WTO and this was affecting trade between the two countries, Mr Sibley said while addressing a workshop on “Doing business with USA” here.

He said while on the one hand India’s exports to the US had increased by US$ 2 billion last year, exports from the US to India had increased by only US$ 200 million and this was largely due to tariff barriers. “This trend is not sustainable. There is an asymmetry in market access,” he said, adding “If the discrepancy continues to widen, there could be a backlash.”

He, however, dismissed fears of an immediate backlash, saying “We are not on the brink of a backlash” or it happening in the forseable future. Mr Sibley said his country was working with the WTO to reduce tariff barriers world over and to that extent would also address the barriers that existed in India.

The consul-general further said exports from India to the US were rising as it was providing quality goods at competitive prices and was also producing goods wanted in the US. “The US has a very good trade environment because of attractive tariff duties, which is not the case for the opposite partner. Tariff barriers could be a potential problem,” he said.

Stressing the need for completing economic reforms in India, Mr Sibley said “The US does not want less trade from India, but wants more quality goods at reasonable prices, but we want to see a very sharp increase in the other direction too (exports to India)... That element is lacking.” He said the reform process in India, initiated in the early 90s which had led to sharp jump in exports, was ‘not complete’ and “considering the existing situation some of the next steps required to be taken for completion of economic reforms are difficult to implement”. Commenting on the ‘Use American’ bill introduced in 16 US states, which was affecting export of engineering goods from India, the consul general said, “It is probably too immature to be passed.” On introduction of ‘Bio Terrorism Act’, he said “Though it has a potential to be seen as non-tariff barrier, the act was introduced mainly in the aftermath of 9/11 attacks. It is due to emphasis on much higher level security.”

Earlier, speaking at the workshop organised by the Federation of Indian Export Organisations (FIEO), jute industry’s Mr Sanjay Kajaria while highlighting the environmental aspects of using jute products suggested setting up of ‘disposal protocol’ to increase exports of yarn, geotextiles and hessian to the US. Mr Sibley said the industry should go for aggressive marketing and if possible could highlight the positive aspects through advertisement on US television.