India: Effects of Tariffs and Nontariff Measures on U.S. ... - USITC

Corruption
Interests within <strong>India</strong>’s trading partner countries have also expressed concern regarding
the implementation period for new or revised <strong>India</strong>n agricultural regulations. For example,
the GMA in 2008 protested to the <strong>India</strong>n government that the May 2008 PFA labeling
amendments mentioned above were to take effect after only six months following public
notification <strong>and</strong>, as a counterpoint, highlighted examples from Canada <strong>and</strong> the United
States in which authorities allowed years to elapse (to allow for redesign, distribution,
<strong>and</strong> marketing changes) before implementing analogous labeling rules. 73 In addition, the
proposed rules were “significantly modified” five months into the six-month period, but
no implementation extension was granted. 74
Corruption injects uncertainty into U.S.-<strong>India</strong>n agricultural trade relations <strong>and</strong> increases
the costs for exporting U.S. agricultural products to <strong>India</strong>. 75 In international trade
transactions, corruption most commonly occurs as improper payments to customs or port
<strong>of</strong>ficials. 76 Acknowledgement <strong>of</strong> corruption as an issue requiring transnational action has
grown in recent years; the United States <strong>and</strong> <strong>India</strong> are among 140 signatories to the 2003
United Nations Convention Against Corruption. 77 More directly, some U.S. <strong>and</strong> Asian
business advocacy organizations have explicitly recognized corruption as a barrier to
trade. 78
One widely used measurement <strong>of</strong> global business risk that examines corruption on a
country-specific basis, the Opacity Index, placed <strong>India</strong> in the bottom one-third <strong>of</strong> the
world’s largest economies in 2008 for corruption. 79 Similarly, Transparency
International’s 2008 Corruption Perceptions Index ranked <strong>India</strong> tied for 85th <strong>of</strong>
180 countries, with a score that indicates “a serious corruption problem in the [<strong>India</strong>n]
public sector.” 80 The scores underlying <strong>India</strong>’s ranking on the index improved from 2004
73 Rochette, FPA, to Directorate General <strong>of</strong> Health Services, Government <strong>of</strong> <strong>India</strong>, July 30, 2008.
74 Rochette, Association <strong>of</strong> Food, Beverage <strong>and</strong> Consumer Products Companies, to Gloria Blue, U.S.
Department <strong>of</strong> Commerce, November 6, 2008.
75 See Asia-Pacific Council <strong>of</strong> American Chambers <strong>of</strong> Commerce (APCAC), “Corruption,” n.d. (accessed
June 11, 2009); Begovic, “Trade Liberalization: The Way Forward,” October 25–27, 2006, 8–9. Corruption is
popularly defined broadly as “the abuse <strong>of</strong> public <strong>of</strong>fice or public position for private gain.” United Nations
Development Programme (UNDP) <strong>and</strong> Global Integrity, “A Users’ Guide to Measuring Corruption,”
September 2008, 6. The World Bank <strong>and</strong> Transparency International have used a slight variation <strong>of</strong> this
definition as well. Ibid., 12.
76 Corruption at this level <strong>of</strong> government can be characterized as petty corruption (low- to midlevel
<strong>of</strong>ficials <strong>and</strong> small monetary amounts), as opposed to gr<strong>and</strong>, or political, corruption (larger amounts <strong>of</strong> money
<strong>and</strong> effects undermining the legitimacy <strong>of</strong> government). UNDP <strong>and</strong> Global Integrity, “A Users’ Guide to
Measuring Corruption,” September 2008, 8.
77 The United States has ratified the convention; <strong>India</strong> has not. United Nations Office on Drugs <strong>and</strong>
Crime, “United Nations Convention against Corruption” (accessed June 11, 2009).
78 See USAEngage, “NFTC <strong>and</strong> USAEngage Commend U.S. Senate for Approving Corruption
Convention,” September 15, 2006; National Foreign Trade Council, “Bill Reinsch’s Speech on Impact <strong>of</strong>
Corruption on Global Business,” September 17, 2008; <strong>and</strong> APCAC, “Corruption” (accessed June 11, 2009).
79 Kurtzman <strong>and</strong> Yago, “Opacity Index 2007–2008,” April 2008, 3. On the Opacity Index, <strong>India</strong> was
ranked 40th <strong>of</strong> 48 countries overall. The index examines factors such as corruption, regulatory effectiveness,
<strong>and</strong> economic <strong>and</strong> enforcement policies to measure the costs <strong>and</strong> frequency <strong>of</strong> risks to business.
80 Transparency International, “2008 Corruption Perceptions Index,” September 23, 2008; Transparency
International, “2008 Corruption Perceptions Index: Regional Highlights: Asia-Pacific,” n.d. (accessed
June 11, 2009).
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