By Elton Gomes
The United States Trade Representative (USTR) in its annual report released Friday has said the complex customs system of India, along with processing delays has proven to be a hindrance to US imports coming into the country. The report further states the absence of an official publication containing all relevant and current information on tariffs, fees, and tax rates on imports in India hinders the flow of free trade between the two countries.
The US government blamed India’s complex tariff structure, which has multiple exemptions that vary as per each product, user, or use and said it was complex and characterised by a lack of transparency.” Another problem mentioned in the report is the extensive documentation required by customs officials, which causes a lengthy delay in the shipment of goods.
Steps taken by India
In fact, in 2015, the World Trade Organization (WTO) also stated that India’s import structure is complex. Although India took steps to facilitate trade, the WTO responded by saying that despite these measures, the licensing and permit system, along with the exemption system of customs, continue to be a key hindrance in smooth trade.
Since 2016, the Indian government has taken several measures to improve its trade facilities.Indias Central Board of Excise and Customs (CBEC) aimed at establishing a paperless system for cargo clearances. In light of the new reforms, cargo can be cleared within hours as opposed to days. The reforms caused India to jump 30 places from 130 to 100 in the ‘ease of doing business’ index.
However, clearly, administrative trade barriers continue to hinder India’s relationship with the USA. One example of such a barrier is import licensing. Although India has done away with import licensing requirements of most consumer goods, certain products face licensing-related trade barriers.
The USTR also said that according to the 2017 National Trade Estimate, the US goods and trade deficit with India had increased by 4.3% to $24.3 billion. Additionally, US imports from India, amounted to a total of $46 billion, signifying an increase of 2.7%