High tariffs will harm India-US business ties: US Commerce Secretary
Urging India to cut duties on imports of American manufactured products, US Commerce Secretary John Bryson Monday said such high tariffs would cause 'significant harm' to the business ties of the two countries in the long run.
"If India is not able to readily access US products or attract strategic investments from US businesses, our progress together could slow down. In the long-term, this could cause significant harm," Bryson said at a meeting organised by the Federation of Indian Chambers of Commerce and Industry (Ficci) here.
Bryson, who is on his first official visit to India as commerce secretary, pointed out that India imposed multiple tariffs on goods imported from the United States.
"There are many tariffs on American products that are still too high. Capital goods such as power-generating equipment face a basic duty of 7.5 per cent and an effective rate of 22 percent when taxes are added. Some medical products also have a 7.5 per cent rate. Grapes, citrus, and other fruits face a 30 per cent duty."
"Also, we are concerned about measures that interfere with US sourcing decisions in areas like IT, electronics and solar energy. This makes it harder to invest in India," he said.
Bryson urged Indian entrepreneurs to increase investments in the US saying India's foreign direct investment in the country was only $3 billion, far below the potential. If investments made through other countries are included, total Indian investments in the US would be $7 billion.
"India is a fast-growing source of direct investment into the United States. You employ tens of thousands of American workers in professional, technical, and scientific and other services," said Bryson, who is on a six-day official visit to India.
American companies have invested $27 billion in India wide range of sectors, including services, manufacturing and information technology.
"With trade and investment, it is clear that we have great opportunities. But I would be remiss not to mention that barriers still exist to building our economic relationship," the US commerce secretary said.
India is the 13th largest trading partner of the United States and its 17th largest merchandise export market.
India's merchandise exports to the Unites States rose to $36 billion in 2011, while its imports increased to $21 billion.
"While we must remain vigilant to ensure strong and balanced trade growth, it is clear that we are on a path that is mutually beneficial for each of our economies," said Bryson.
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