26 - 'I heard the other day that India's tariffs are some of the highest in the world. '
http://www.usibc.com/Documents/HuntsmanSpeech.pdf 'India's Circumspect Embrace of Globalization'
Keynote Address by Ambassador Jon M. Huntsman Jr.
Deputy United States Trade Representative
First Manhattan India Dinner
Organized by U.S.-India Business Council, U.S. Council for International Business and Asia Society
February 5, 2003
India has made in the past, and has begun to change very slowly. India’s tariffs are today, more than ten years after the beginning of economic reform, the highest in the world, except for those of Pakistan, according to the World Bank.
India likes to export, but has a grudging attitude at best towards imports. Indians understand the almost universally accepted truth that a vibrant export sector is necessary for poverty alleviation and sustainable development. Yet they remain skeptical of imports - even of products such as life-saving medical equipment not manufactured in India. So the country maintains tariffs among the highest in the world, imposes additional taxes when tariffs come down, and erects non-tariff barriers. These multiple, onion-like barriers discourage potential exporters.
For example, India’s tariff and taxation structure undermines its tariff commitments in the WTO. This structure has impeded trade in such items as medical equipment, chemicals, soybean oil, and distilled spirits. Differential treatment of imports and domestic production of phosphates, for instance, has caused a $400 million U.S. market to evaporate while India’s agricultural sector suffers from lack of quality fertilizer. Special taxes have increased the price of imports so that they no longer are competitive in the Indian market. The recent change in customs valuation methodology for imported films threatens to suffocate substantial opportunities in bilateral trade and creative collaboration.
India has proposed that by 2010 all peak tariffs be reduced to three times a country’s average duty. In the case of the United Sates, our average duty is 2.6 percent; three times that amount would be 7.8 percent, which is very close to the 8 percent we have proposed.
Trade in services has created a substantial number of jobs in India. For example, General Electric employs more than 15,000 people in India who provide services such as accounting and customer service to its offices throughout the world. Approximately 3,300 software engineers are employed by Hewlett-Packard Co. in India. In addition, as I have already noted, developed-country firms are increasingly outsourcing back-office and technology services from Indian firms, creating high-paying jobs in engineering, medical services, research and development, and other services fields. The tremendous success of India’s high-technology sector offers a potent argument for India’s interest in an open trading system. India exported over $6 billion worth of software last year -- accounting for 13 percent of the country’s total exports. Over the past five years, the annual growth rate for India’s software exports has been 45 percent. And there’s every reason to believe it will keep growing. The Software Engineering Institute at Carnegie Mellon University gives its ‘top quality’ ranking to only 48 software companies in the world; nearly two-thirds of them are based in India.
That's the one. Thanks!