India just hosted the Global Entrepreneurship Summit this week. It used the glittery event to promote greater U.S. trade and investment in India, with promises of “Prosperity for All.”
When Prime Minister Narendra Modi was elected in 2014, he promised to open India’s notoriously closed economy. That same year, Modi’s government launched “Make In India” with much fanfare to lure foreign investment.
But many of the reforms he promised never materialized, and his government still imposes hurdles to keep foreign businesses out.
Since 1974, the United States has promoted global development by eliminating tariffs on thousands of products imported from underdeveloped countries. The program is known as the Generalized System of Preferences (GSP), and India is the prime beneficiary.
We opened our market to a huge number of Indian businesses, allowing them to sell, tariff-free, everything from textiles, gems and jewelry to manhole covers. India’s products were more attractive to American consumers than similar products from other countries.
In return, India’s government is working overtime to keep American products and businesses out.
GE won a $2.6 billion contract in 2015 to make 1,000 diesel locomotives for the Indian railway. But the railways ministry abruptly reversed course in the fall of 2017, telling GE it was no longer interested in diesel engines. This is a classic example of the Indian government changing the terms of an existing deal to block a foreign firm from doing business there.
Indian government interference in the health-care market is outrageous. They cap the prices of vital medical devices, including heart stents and artificial joints, and then refuse to let foreign companies stop selling those products, even in the face of mounting losses. The Indian government imposed rules forcing many of these medical-device manufacturers to keep selling products after the same government dramatically slashed those prices. India also refuses to grant patents for most medicines, favoring its own generic knock-off pharmaceutical industry.
India demands all American telecommunications suppliers transfer their technology to India and reveal source code. No wonder India is regularly featured on the U.S. government’s Priority Watch List of the world’s worst offenders of American intellectual property rights. Counterfeiting and piracy of software, music and movies is rampant in India.
Harley Davidson, one of the most iconic American companies, is subject to a 100 percent tax on its bikes in India. Doubling the price of a Harley means Indians drive Indian and Japanese motorcycles, not American.
Agricultural goods don’t fare any better in India than manufactured goods. India bans American dairy, wheat and barley from the Indian market with protectionist regulations that target American farmers.
As a result of this one-way Fake in India policy, the United States has a nearly$30 billion trade deficit with the Asian nation.
U.S. Trade Representative Robert Lighthizer will be conducting a review to ensure countries in the GSP program are meeting the eligibility criteria. Countries receiving benefits are supposed to provide fair access to their markets and respect U.S. intellectual property rights.
India fails on both counts.
India’s benefits are set to expire at the end of 2017. The U.S. government should make their expiration permanent.