Today, Congressman Adrian Smith (R-NE) participated in a House Ways and Means Subcommittee on Trade hearing on U.S. -- India relations. During the hearing, Smith noted agricultural exporters in Nebraska's Third District experience tariff and non-tariff barriers to trade in India. Smith asked Allen F. Johnson, who served as Chief Agricultural Negotiator in the Office of the United States Trade Representative from 2001 to 2005, to explain these barriers. Video of the exchange is available at: http://www.youtube.com/watch?v=NpEerP_R2z0.
"The hearing today examined both the enormous opportunities as well as the challenges in our trade relations with one of the world's largest and fastest growing economies," said Smith. "As we work to deepen and improve ties with India, it is critical Nebraska producers and companies are competing on a level playing field in this market. I will continue to insist on science-based standards and internationally established trade practices as we work to reduce barriers and expand markets for American goods in India and around the world."
Preferred Popcorn, LLC is a Nebraska farmer-owned company based in Chapman, Nebraska looking to trade with India, but facing tariff and non-tariff barriers. As part of the hearing, Preferred Popcorn submitted a letter to Congressman Smith to share their experience.
"The large population base in India and the productive nature of Nebraska agriculture make the two countries logical trading partners," said Norm Krug, CEO of Preferred Popcorn. "There is a higher tariff on popcorn for distribution. Because most end users of popcorn are not in the business of distribution, the higher tariff rate almost eliminates exporting popcorn to India. India also requires a fumigant that is not legal for use in the U.S. This makes it very difficult or impossible to export agricultural products to India."
The United States and India are experiencing the largest bilateral trade and investment flows ever with total goods and services trade in 2011 recorded at $86 billion between the two countries. India is the 13th largest market for U.S. goods and services.
As India strives to prepare its economy for the challenges of its changing demographics, the country is putting in place policies to increase manufacturing, domestic industries and agricultural production. The hearing today was an effort to highlight opportunities in the Indian market while drawing attention to some of the policies which could signal India is turning inward and erecting barriers to trade and investment. If the trend continues, U.S. businesses could find it increasingly difficult to sell to, enter, and operate in India.