The Indo-US trade deal is “almost ready” and can be signed whenever the local political situation in the United States permits the two countries to, Indian Commerce and Industry Minister Piyush Goyal said during US-India Strategic Partnership Forum’s third annual leadership summit, ANI reported. He reportedly said that he had been in touch with the US Trade Representative Robert Lighthizer and the deal can be concluded before or soon after the US Presidential elections in November.
In another conversation with Mastercard CEO Ajay Banga at the same virtual event, Goyal stressed on the need for a reciprocal relationship when it comes to establishing global standards.
‘In the next 6 months, will make it possible for companies to get regulatory approval in the US itself’: Goyal
Goyal said that the government is looking to create a common application form “like a digital locker” or the American common application form for undergraduate studies to dispense regulatory approvals for companies looking to set up operations in India.
“One common application form like a digital locker which has all your basic information and then you have the annexures or the addenda which are focussed to each college. … Similarly, we are looking at that kind of a database which should be supplemented with annexures going to different ministries or different regulatory processes. I assure you that in the next six months, we will make it as simple as you sitting in America, in your offices and homes, using your mouse and being able to register in India, buy land in India, get all the regulatory approvals. We will trust you for your self-certification and help you come to India.” — Piyush Goyal
‘Need to remove non-tariff barriers and create reciprocal global standards’: Goyal
US, Europe create non-tariff barriers through quality control orders and standards: “I think the United States is the leader of creating non-tariff barriers through these quality control orders and standards. Europe has such extremely impossible to meet standards on several products which work as a non-tariff barrier and create an impediment to free flow of goods and services.”
India should have used quality control orders: “I think India has been one of those countries which has not so far used their quality control orders or standards as much as we should have. In fact, I was seeing the record, we have not got even one tenth the number of quality control orders or standards as Europe or the United States have. And I think that has actually been to the detriment of the Indian industry because the Indian industry never focussed on quality as much as it should have. They were able to serve a large 1.3 billion market domestically and gradually, over the years, India landed up with low quality production basis. I think it’s important that India now establishes itself as a high quality manufacturer.”
Government is introducing quality control orders on several products: “Towards that end, we are introducing quality control orders in different sectors of our production basis. This afternoon, I have signed a file where I am going to be introducing quality control orders on several more products very soon and this exercise is going to continue. India will have its own quality standards, but we are open to learning from the existing global standards. So before I set up any quality control order or new standards, I do study the landscape globally but I am creating my own standards and very soon all my procurement is going to be based on Indian standards just like Indian companies have to meet your standards in the US or other countries when we have to supply goods or services to the US.”
Standards have to be mutually adhered to: “I think it should be a two-way traffic wherever other countries are willing to accept Indian standards, we will be open to accepting your standards also.” Banga pointed out that in the absence of global, interoperable standards, SMEs will have a very difficult challenge in the coming years, and suggested that Goyal could talk about it at the upcoming G20 conference.
Horizontal standards have hurt Indian MSMEs: “I would be delighted if we could come to some kind of an understanding globally at realistic standards. Unfortunately, on many products, overarching regulations have sought to be imposed more like a non-tariff barrier.” He cited the case of milk products in Europe or pharmaceutical products whose horizontal standards make it “almost impossible” for Indian businesses to engage with that market. “We have MSMEs in India which are equally hurt by such standards in the world.” It takes two to tango, he basically said quoting an Indian idiom. The aim of India as a country, he said, is to remove these non-tariff barriers that many countries have created.
No word on equalisation levy
It is interesting that in a discussion about Indo-US trade deal and non-tariff barriers, equalisation levy was not brought up at all. Multiple industry bodies and lobby groups had called this levy discriminatory and cumbersome for smaller players to adhere to in their responses to Lighthizer’s investigation into digital services taxes under Section 301 of the US Trade Act. India, however, had stood by the levy in its own submission.
In Europe, after the US threatened to hit France, UK, Spain and Italy with retaliatory tariffs if they implemented their proposed digital taxes, the European nations gave in and offered to limit the scope of their taxes. If the Indo-US trade deal goes through despite the imposition of the equalisation levy on foreign e-commerce operators, that could truly be a diplomatic coup for Goyal.