Context:
Prominent U.S. industry associations, including the US Chamber of Commerce (USCC), Coalition of Services Industries (CSI), and companies like Harley-Davidson, have urged the Trump administration to pressure India into reducing tariffs and regulatory barriers. The call comes ahead of the US Trade Representative’s (USTR) review of unfair trade practices and the announcement of reciprocal tariffs.
Key Demands from US Industry Associations
a) Pharmaceuticals and Healthcare
- USCC seeks:
- Lower import duties on pharmaceuticals to promote affordability and greater trade.
- Inclusion of pharmaceutical manufacturing duallocation in any future trade agreements to strengthen supply chains.
- Relaxation of price controls on patented medicines and medical devices (e.g., stents, knee implants) that deter investments.
- Permission to import refurbished or reused medical equipment, such as CT scanners and advanced surgical systems.
b) Consumer Goods
- Reduction of 28% GST on non-alcoholic aerated beverages, currently classified as sin/demerit goods, impacting U.S. company profitability.
c) Automotive Sector
- Harley-Davidson highlights extreme tariff disparities:
- 68% duty in the EU,
- 18% in Brazil,
- 60% in Thailand,
- 100% in India, calling for immediate tariff rationalization.
d) Financial Services & Digital Sector
- CSI raises concerns about:
- Local content requirements creating unfair trade barriers.
- Preferential treatment for India’s domestic payment systems like UPI and RuPay cards.
- Data localisation policies, hindering fair competition.
Additional Policy Recommendations
- USCC calls for:
- Competitive neutrality in state-owned enterprises (SOEs).
- A public procurement agreement between the two nations, allowing mutual access to public sector contracts.
- Liberalization of additional SOE segments as part of any trade pact.
Strategic Implications
- The demands underscore growing trade tensions and reciprocity issues between the U.S. and India.
- These industry groups aim to secure greater market access, fairer regulatory frameworks, and balanced tariffs for American companies in India.
The strong push from US industry lobbies signals heightened trade friction over high tariffs, local content rules, and market access restrictions in India. As the U.S. evaluates reciprocal tariffs, these industry demands could shape upcoming bilateral trade negotiations and influence the trajectory of India-US trade relations.
