India has made significant changes to some of its policies, including FDI, tariffs and customs procedures, since May, "improving" access for US trade and investment to the Indian market, a federal trade commission has said.
In a report prepared at the request of the House of Representatives Committee on Ways and Means and the Senate Committee on Finance, US International Trade Commission (USITC) said after Narendra Modi became Prime Minister, the government has made significant changes to its policies in the key areas of foreign direct investment (FDI), tariffs and customs procedures, local-content and localisation requirements, and standards and technical regulations.
In the report, which was released to the press on Thursday, USITC said since May 2014 India has raised FDI equity caps in the insurance and defense industries, removed the requirement for pre-investment authorisations in several industries and permitted FDI in certain segments of the railway industry.
"These changes have helped to improve India’s overall investment regime," USITC told the US Congress in its investigative report.
Noting that India has made a small number changes in its tariffs and customs procedures, the 258-page report said New Delhi has reduced tariffs on some information, communications, and telecommunications (ICT)-related products, but increased tariff on several telecommunications-related products.
Some changes have improved US access to the Indian market, the federal trade body felt.
India has made changes to policies and practices regarding local-content requirements and localisation measures, the report said, adding that the changes expand or propose to expand several local-content and localisation requirements affecting certain ICT, electronics, and defense and civil aerospace products.
The changes affect measures that require foreign firms to purchase Indian inputs, conduct a share of business in India, conduct certain business activities in India, or submit to India-specific testing or registration, the report said.
Further, the government has expressed a commitment to harmonise India’s standards with international standards and to increase engagement with the US.
Nevertheless, US industry and government representatives report that new India-unique mandatory standards and technical requirements that increase costs, delay time to market, and operate to exclude certain US products from the Indian market have been created, the report noted.
However, USITC said the government introduced no new IPR laws during May 2014 June 2015 to address barriers to the protection of trade secrets, regulatory test data, patents, trademarks, and copyrights.
Nevertheless, US industry and government representatives noted the willingness of Modi government officials to engage in discussions with the US on IPR issues, it said.
According to USITC the Modi government also pursued several broad policy changes to enhance India’s business climate during May 2014 July 2015.
"Changes in the following areas particularly may positively affect India’s trade and investment climate, improving India’s economic infrastructure, improving the ease of doing business, creating greater bureaucratic transparency and accountability, changing taxation policy, and encouraging state-level policy changes in India," it said.