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Opinion

India’s self-reliance initiatives can create trade barriers with other nations, says outgoing US envoy

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New Delhi’s self-reliance and “Make in India” initiatives have the potential to lead to higher tariffs and other trade barriers that could affect the country’s ability to integrate into global value chains, outgoing US Ambassador Kenneth warned Tuesday. Juster.

Juster pointed to “frictions and frustrations” in trade and investment between India and the United States, and said the two sides were unable to finalize even a “small trade package” despite persistent efforts. There are also increasing restrictions on market access for some US goods and services, rising fees, new limitations on the free flow of data, and a “less than predictable regulatory environment for investors,” he said.

In a farewell speech, he also referred to the need for both countries to maintain their commitment to diversity and tolerance to maintain their status in the world and the strength of bilateral ties.

On the strategic front, Juster said the time has come for India and the US to develop guidelines and “even red lines” for a stronger Indo-Pacific architecture to address future challenges. Without naming China, he said this framework should allow all countries to prosper in a region that respects sovereignty and the peaceful resolution of disputes.

Juster, a political appointee in the Trump administration who has overseen key aspects of strategic relations between India and the United States over the years, is resigning this month. His speech, at an event organized by the Observer Research Foundation attended by high-level diplomats and the media, focused largely on advancing ties in key areas such as trade, defense and security, energy and health.

Noting that the US is India’s largest trading partner and India the US’s twelfth largest partner, he said that two-way trade amounted to $ 146.1 billion in 2019, up from $ 18.6 billion in 2001. It is “frustrating” that bilateral trade is not close. its potential and greater openness by India would boost trade and investment, he added.

“This is a lot of good news for the economic and commercial relationship. But it would be less than sincere if you didn’t notice that there are also frictions and frustrations on the trade and investment front. Despite persistent efforts, we were unable to finalize even a small trade package, ”Juster said.

“Additionally, there are increasing restrictions in India on market access for certain US goods and services, rising tariffs, new limitations on the free flow of data, and a less predictable regulatory environment for investors,” he said.

Juster added: “As with the US, India naturally would like to improve its economic security by increasing domestic production and reducing critical dependencies … The current view in India is that the best way to meet these various objectives is through a policy of ‘Self-Reliance’, emphasizing ‘Make in India’, while seeking to engage globally, participate in global value chains and be an exporter to the world.

“It remains to be seen if all of these policies are compatible and mutually reinforcing, or if they will lead to higher tariff and non-tariff barriers to trade. The latter would limit India’s ability to truly integrate into global value chains and, in the process, raise prices for Indian consumers. ”

Juster said India has a “strategic opportunity to become an alternative destination for manufacturing investments,” as American and other companies find it “increasingly difficult to operate in China or seek to diversify away from supply chains. led by China, “but the Indian government to take more measures to fully benefit.

Both the United States and India have benefited from their diverse populations and “acceptance of India’s diversity will always be what makes it exceptional,” he said. “It is a source of strength for this great country and an inspiration for all of us,” he added.

“While none of us is, nor has been, perfect, we understand that preserving our commitment to diversity and tolerance is important to maintaining our status in the world and the strength of our bilateral relationship,” said Juster.

Without referring directly to China’s aggressive actions along the Royal Line of Control (LAC) or in other parts of the Indo-Pacific, Juster said the United States and India are committed to a rules-based order, peace and diplomacy, while there are others who “Choose suicide vests or military raids.”

In response to a question, Juster said the United States has been “very supportive” amid the India-China border standoff. “We both share a vision of the Indo-Pacific region … and that is an inclusive vision that provides opportunities for all countries to grow and prosper, but also wants to avoid incursions of any kind, intimidation and predatory financing, and when there is a situation that goes along that line, we cooperate to try to resist it, “he said.

The two sides have deepened cooperation on defense and security issues, including efforts to provide security beyond its borders, and convergence in the Indo-Pacific, which has the world’s fastest growing economies and most populous nations. , reflects this cooperation, he said.

“The region needs stability, leadership and a democratic development model that does not threaten the sovereignty of other countries. That is why a strong and democratic India is an important partner in promoting peace and prosperity, ”he said.

“We are now building the foundations for a stronger Indo-Pacific architecture that will allow us to address the challenges that lie ahead. Our mission for the next five years and beyond should be to give this effort more shape and substance: to develop guidelines and, if necessary, even red lines, ”said Juster, adding that this would allow all countries to prosper in a region. that respects sovereignty. a rule-based order and a peaceful resolution of disputes in accordance with international law.

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