US trade deficit with India reaches .7bln in '06

Washington, Apr 3: The US goods trade deficit with India was 11.7 billion dollars in 2006, an increase of 920 million dollars from 10.8 billion dollars in 2005.

The US goods exports in 2006 were 10.1 billion dollars, up 26.3 per cent from the previous year.

Corresponding US imports from India were 21.8 billion dollars, up 16.1 per cent.

India is currently the 21st largest export market for US goods, according to the annual National Trade Estimate on Foreign Barriers (NTE) report released by the US Trade Representative (USTR) here yesterday.

It said US exports of private commercial services (excluding military and government) to India were 5.2 billion dollars in 2005 (latest data available), and US imports were 5.0 billion dollars.

Sales of services in India by majority US-owned affiliates were 2.2 billion dollars in 2004 (latest data available), while sales of services in the United States by majority India-owned firms were 1.8 billion dollars.

It said the stock of US foreign direct investment (FDI) in India in 2005 was 8.5 billion dollars (latest data available), up from 7.7 billion dollars in 2004. The US FDI in India is concentrated largely in the information, manufacturing and banking sectors.

The report notes that India's tariffs remain high. US producers encounter tariff and non-tariff barriers that impede their exports, despite India's economic reform program initiated in 1991.

While US exports continued to grow in 2006 -- continuing a positive growth trend since 2001 -- substantial expansion in bilateral trade will depend on continued and significant additional Indian liberalisation.

The USTR documentment says The United States has actively sought market-opening opportunities in India, both bilaterally and multilaterally in the Doha Development Round.

In December 2006, the United States requested to join the European Communities' WTO dispute settlement consultations on India's additional and extra additional duties on wines and spirits. India rejected that request.

On March 6, 2007, the US requested WTO dispute settlement consultations with India over the additional and extra additional duties.

The report complains that India's amended patent law extends product patent protection to pharmaceuticals and agricultural chemicals. While a positive step, these changes do not address several important weaknesses in India's patent law. For example, the new law does not clarify some ambiguities regarding the scope of patentable inventions.

There is also a large backlog in pending patent applications, resulting in long waiting periods for patent, it says.

It said India's copyright laws need updating and enforcement is weak. The Indian government has proposed amendments that would update the copyright laws to address issues related to the internet and digital works.

However, the proposed amendments have some deficiencies.

It complains that India's criminal justice system does not effectively support the protection of intellectual property.

India's criminal IPR enforcement regime, including border protection against counterfeit and pirated goods, remains weak.

The report voices concern on India's weak multilateral commitments in basic and value-added telecommunications services and the apparent bias of telecommunications policy towards government-owned services providers.

The USTR notes a significant progress made toward resolving several payment disputes that American power sector investors have with Tamil Nadu.

UNI