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

packaging <strong>and</strong> labeling requirements, pricing policies, intellectual property rights
(IPR) policies, <strong>and</strong> customs procedures;
information on <strong>India</strong>n government regulations, including state regulations, covering
agricultural markets <strong>and</strong> foreign direct investment (FDI) affecting U.S. agricultural
products in <strong>India</strong>;
an evaluation <strong>of</strong> the impact <strong>of</strong> <strong>India</strong>’s food marketing <strong>and</strong> distribution system,
including market structure, transportation infrastructure, <strong>and</strong> cold-storage capacity,
on U.S. agricultural products in the <strong>India</strong>n market; <strong>and</strong>
a quantitative analysis <strong>of</strong> the economic effects <strong>of</strong> <strong>India</strong>n tariffs <strong>and</strong>, to the extent
possible, NTMs on U.S. agricultural exports to <strong>India</strong>.
Scope <strong>of</strong> the Report
In response to the Committee’s request, this study examines the effects <strong>of</strong> <strong>India</strong>n tariffs
<strong>and</strong> NTMs on U.S. agricultural exports. As shown in figure 1.1, U.S. agricultural
exporters <strong>and</strong> food companies reach <strong>India</strong>n consumers primarily by two routes: the export
<strong>of</strong> agricultural goods <strong>and</strong> FDI. U.S. agricultural exports face <strong>India</strong>n tariffs <strong>and</strong> NTMs
before they enter that country’s food processing sector <strong>and</strong> marketing <strong>and</strong> distribution
system. Besides competing with other exporters, U.S. firms must compete with <strong>India</strong>n
domestic agricultural production, which is highly regulated <strong>and</strong> supported by the
government. In addition, U.S. agricultural firms access the <strong>India</strong>n market through FDI, by
establishing facilities in the processing sector or by operating in certain segments <strong>of</strong> the
food marketing <strong>and</strong> distribution system. In either case, investment decisions by U.S.
firms are heavily influenced by <strong>India</strong>n policies covering FDI <strong>and</strong> IPR.
As requested by the Committee, the report provides two types <strong>of</strong> information:
(1) background information on <strong>India</strong>’s production, consumption, <strong>and</strong> trade in agricultural
products, <strong>and</strong> (2) information on the factors that directly impact U.S. exports <strong>and</strong> firms,
including tariffs, NTMs, market <strong>and</strong> distribution conditions, FDI, <strong>and</strong> IPR. Factors
described <strong>and</strong> analyzed in this report are included in the framework provided in figure 1.1.
The figure identifies principal <strong>India</strong>n agricultural policies (shaded parallelograms) that
affect the system, including those bearing on domestic production <strong>and</strong> marketing, trade,
investment, <strong>and</strong> IPR. Also shown are relevant market factors (ovals) that affect
consumption <strong>and</strong> imports.
Background information is covered in chapters 2–4 <strong>of</strong> the report. <strong>India</strong>n agricultural trade
trends are presented in chapter 2, focusing on trade with the United States <strong>and</strong> the U.S.
competitive position in the <strong>India</strong>n market vis-à-vis other global suppliers. <strong>India</strong>n
agricultural consumption is discussed in chapter 3, including a description <strong>and</strong> analysis <strong>of</strong>
<strong>India</strong>n consumption patterns, preferences, <strong>and</strong> trends, which are the ultimate drivers <strong>of</strong>
current <strong>and</strong> potential dem<strong>and</strong> for U.S. agricultural products. <strong>India</strong>n farm-level production,
agricultural processing, <strong>and</strong> domestic agricultural policies are examined in chapter 4.
This chapter explains how highly regulated domestic production, supported by trade
restrictions, is a major factor behind the very low share <strong>of</strong> imports, including U.S.
imports, in the <strong>India</strong>n market.
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