Kerry says US, India must resolve trade differences

US Secretary of State John Kerry on Sunday said that India and America should “earnestly” resolve differences on trade and economic issues and move expeditiously towards signing a bilateral investment treaty.

The US is set to press India hard to ease restrictions on investment and trade during the bilateral strategic dialogue that Kerry and External Affairs Minister Salman Khurshid will co-chair on Monday. New Delhi, on the other hand, is likely to point out that India’s Information Technology companies too have concerns over certain provisions in the Comprehensive Immigration Reforms Bill introduced in American Senate.

India will seek early meeting between Commerce Minister Anand Sharma and the new US trade representative Michael Froman. New Delhi will point out that the right platform to discuss the trade related issues and explore ways to address each other’s concerns is the US-India Trade Policy Forum, which is headed by Commerce Minister of India and the US Trade Representative, but has not met since September 2010.

Kerry, who arrived in New Delhi on Sunday, said that India and the US should “earnestly address the differences” on trade and economic issues and need to sign a bilateral investment treaty as soon as they could.

He was delivering a speech on US-India Strategic Partnership just a few hours after arriving here.

Kerry recalled his visit to New Delhi, Mumbai and Bangalore in early 1990s, when he led the first US Congressional Trade Delegation to India during the early years of the country’s move towards opening up its economy. Recalling how Prime Minister Manmohan Singh, who was then the finance minister in the Narasimha Rao’s government, led India towards economic liberalisation, he stressed on the need to move forward.

“What we need actually is a policy that looks forward,” he said, sending out a tacit message to New Delhi to lower trade barriers and raise caps for Foreign Direct Investment in key sectors.  
  He is likely to convey to Khurshid on Monday the US business community’s concerns over “increasing obstacles to trade and investment” in India. Officials of the US Department of State said that Kerry would convey to Khurshid concerns on “intellectual property protection, local content restrictions and continued restrictions on foreign direct investment” as well as “taxation problems”. More than 40 American Senators last week wrote to Kerry asking him to press Indian Government “for swift action” and make it clear to Khurshid that Washington would “consider all trade tools at its disposal” if New Delhi did not end “its discriminatory practices”.

Officials in New Delhi, however, pointed out that some of the issues spilled out to public domain as the bilateral mechanisms to address such issues had not met for quite sometime.“There are ample fora to discuss whatever issues that might have arisen in the bilateral trade and economic relationship, which, I must emphasise, are on both sides. There are market access issues that we have, and those that they have. We can clearly discuss what we think are areas of divergence and areas of convergence and find solutions to these,” said joint secretary (Americas) in the Ministry of External Affairs, Vikram Doraiswami.

India is also likely to convey to the US its concerns over the provisions of the Comprehensive Immigration Reforms Bill that seek to put in place a ban on client site placement for the workers with H1B visas, new restrictions on client site placement for the ones with L-1 visas and limits on total percentage of both H1B and L1 workers in the workforce of the US companies.