Today, President Donald Trump will meet with India Prime Minister Narendra Modi. Leading up to the meeting, U.S. lawmakers on either side of the aisle have urged the President to press Modi on the removal of barriers to U.S. trade and investment in India (The New York Times). According to these lawmakers, despite the high-level engagement with India, the country has not eliminated major barriers to trade and investment and has not been prevented from imposing new barriers. These barriers include high tariffs, poor protection of intellectual property rights, and inconsistent and non-transparent licensing and regulatory practices.
In a letter to the President, lawmakers claimed that a wide range of sectors from India’s economy remain “highly and unjustifiably” protected, making India a very difficult place for U.S. companies to do business (Reuters). their opinion, the bilateral economic relationship does not perform efficiently due to India’s hesitance in enacting vital market-based reforms.
Major sectors affected are solar and information technology products, telecommunications equipment and biotech products. Further, there are limitations on foreign participation professional services, in addition to numerous restrictive foreign equity caps. The lawmakers’ list of grievances is long and growing.
Currently, Prime Minister Modi is running a “Make in India” campaign as an attempt to boost domestic manufacturing and create jobs (Bloomberg). This may make it difficult for he and the President to reach an agreement, as President Trump’s “America First” agenda creates a clash of economic nationalisms. However, President Trump has called Modi a “true friend” on Twitter, and Modi has expressed excitement in anticipation of the meeting.
For updates on the meeting and information on other relevant trade issues, follow Mercatura Global on Twitter.