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

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TABLE 2.1 <strong>India</strong>: Agricultural imports from the world <strong>and</strong> the United States by product, 2003–08 (million $)—Continued Product Source 2003 2004 2005 2006 2007 2008 Other—Continued Seeds for sowing World 18 20 28 31 46 51 United States 3 4 4 4 5 5 Tobacco World 9 24 18 26 13 17 United States 0 0 1 1 1 1 Hides <strong>and</strong> skins World 219 255 304 344 421 479 United States 7 6 8 8 8 10 Wool World 178 195 211 220 271 271 United States 2 2 1 2 2 5 Cotton World 351 214 160 153 188 340 United States 121 58 39 57 71 112 All other World 219 227 304 312 376 441 United States 21 23 26 24 33 39 Total World 4,735 5,115 5,696 5,918 7,151 8,533 United States 278 215 290 323 435 497 Source: GTIS, World Trade Atlas Database (accessed June 8, 2009). FIGURE 2.2 <strong>India</strong>: Agricultural imports from the world by product share, 2006–08 average All other 27% Palm oil 23% Cotton 3% Soybean oil 8% Wool Peas 4% 7% Cashews Wheat 5% Beans 6% Other fats 6% <strong>and</strong> oils Hides 5% <strong>and</strong> skins 6% Average total imports – $7.2 billion Source: GTIS, World Trade Atlas Database (accessed June 8, 2009). 2-4
In spite <strong>of</strong> U.S. export competitiveness worldwide, 6 <strong>India</strong>n agricultural imports from the United States are limited, both in value <strong>and</strong> in the range <strong>of</strong> products. In 2008, agricultural imports from the United States totaled $497 million <strong>and</strong> accounted for just 6 percent <strong>of</strong> total <strong>India</strong>n agricultural imports that year. In 2008, agricultural exports to <strong>India</strong> represented less than 0.5 percent <strong>of</strong> total U.S. agricultural exports, <strong>and</strong> <strong>India</strong> ranked 39th among leading overseas markets for U.S. agricultural products. Although the United States is considered to be among the world’s most competitive exporters <strong>of</strong> wheat, corn, soybeans, <strong>and</strong> meat, <strong>India</strong>n imports <strong>of</strong> these products from the United States amounted to less than $0.5 million in 2008. During 2006–08, <strong>India</strong>n imports <strong>of</strong> U.S. agricultural products were highly concentrated in a few product categories (fig. 2.3 <strong>and</strong> table 2.1), but in different categories than imports from the rest <strong>of</strong> the world. Almonds, cotton, <strong>and</strong> peas accounted for 70 percent <strong>of</strong> <strong>India</strong>n agricultural imports from the United States during 2006–08; apples, soybean oil, hides <strong>and</strong> skins, <strong>and</strong> processed foods represented an additional 11 percent, while most other products each contributed less than 1 percent. Limited imports from the United States reflect, in part, competition in the <strong>India</strong>n market from other suppliers for certain products. For example, although the United States is considered highly competitive in the global soybean oil market, it faces strong competition from Argentina, which can supply the <strong>India</strong>n market at a lower price, in part, due to Argentine government policies. 7 For other products, however, low import levels reflect high tariffs <strong>and</strong> tariff-rate quotas (milk powder, corn) <strong>and</strong> sanitary <strong>and</strong> phytosanitary (SPS) measures (wheat, pork, poultry, corn). By far, <strong>India</strong>’s largest agricultural import category is vegetable oils. 8 In 2008, <strong>India</strong> was the world’s fourth-largest importer behind the EU-27, 9 China, <strong>and</strong> the United States. 10 Because imports are needed to satisfy domestic dem<strong>and</strong>, 11 applied tariff rates on vegetable oils have been significantly lower than the bound rates that range from 40 to 300 percent. 12 Moreover, vegetable oil imports are not subject to specific NTMs. 13 During 2006–08, palm oil <strong>and</strong> soybean oil imports accounted for 23 percent <strong>and</strong> 8 percent, respectively, <strong>of</strong> total <strong>India</strong>n agricultural imports (fig. 2.2). During this period, imports <strong>of</strong> palm oil increased sharply at the expense <strong>of</strong> soybean oil, largely because <strong>of</strong> relative price movements 14 <strong>and</strong> favorable tariff treatment for palm oil. 15 More than 6 The United States is the largest agricultural exporting country in the world, accounting for about 18 percent <strong>of</strong> global agricultural exports in 2008. It ranks among the world’s most competitive <strong>and</strong> leading exporters <strong>of</strong> several commodities, including soybeans, corn, wheat, poultry, <strong>and</strong> cotton. The competitive advantage <strong>of</strong> U.S agricultural products in global markets is based on highly efficient production, marketing, <strong>and</strong> distribution systems coupled with supportive domestic policies. The United States exports its agricultural products worldwide <strong>and</strong> is a major supplier to several Asian countries, such as Indonesia <strong>and</strong> Thail<strong>and</strong>. 7 NOPA, written submission to the USITC, April 1, 2009. 8 Vegetable oils are classified in HS headings 1507–1515. 9 The EU-27 is composed <strong>of</strong> Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finl<strong>and</strong>, France, Germany, Greece, Hungary, Irel<strong>and</strong>, Italy, Latvia, Lithuania, Luxemburg, Malta, The Netherl<strong>and</strong>s, Pol<strong>and</strong>, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, <strong>and</strong> the United Kingdom. 10 GTIS, World Trade Atlas Database (accessed June 8, 2009). 11 Vegetable oils are a staple food product in <strong>India</strong>, <strong>and</strong> imports consisting mostly <strong>of</strong> palm oil <strong>and</strong> soybean oil reportedly accounted for more than 50 percent <strong>of</strong> <strong>India</strong>n consumption <strong>of</strong> vegetable oils in 2008/09. Aradhey, <strong>India</strong>: Oilseeds, April 16, 2009. 12 For example, as <strong>of</strong> April 1, 2008, the applied tariffs on crude palm oil <strong>and</strong> on refined soybean oil were lowered to zero <strong>and</strong> 7.5 percent, respectively. Aradhey, <strong>India</strong>: Oilseeds <strong>and</strong> Products, May 19, 2008. 13 Industry representative, interview by Commission staff, New Delhi, <strong>India</strong>, May 7, 2009. 14 During 2006–08, <strong>India</strong>’s import unit value for soybean oil was on average 24 percent higher than for palm oil. GTIS, World Trade Atlas Database (accessed June 8, 2009). 15 Industry representative, interview by Commission staff, New Delhi, <strong>India</strong>, May 6, 2009. 2-5
Page 1 and 2: United States International Trade C
Page 3 and 4: U.S. International Trade Commission
Page 5: Abstract This report describes <str
Page 8 and 9: TABLE ES.1 India:
Page 10 and 11: U.S. agricultural products face str
Page 12 and 13: U.S. Foreign Direct Investment U.S.
Page 15 and 16: CONTENTS Page Abstract ............
Page 17 and 18: CONTENTS―Continued Chapter 6 <str
Page 19 and 20: CONTENTS―Continued Figures 1.1. <
Page 21 and 22: ACRONYMS AND TERMS AAY Antodaya Ann
Page 23: ACRONYMS AND TERMS—Continued RGGV
Page 26 and 27: TABLE 1.1 India: A
Page 28 and 29: FIGURE 1.1 India:
Page 30 and 31: India’s central
Page 32 and 33: Despite their weak economic pr<stro
Page 34 and 35: Approach Current India</str
Page 36 and 37: Bibliography Birner, Regina, Surupt
Page 38 and 39: World Bank. Agriculture for Develop
Page 46 and 47: premium); (2) India</strong
Page 48 and 49: include government export restricti
Page 50 and 51: TABLE 2.3 India: A
Page 54 and 55: Exports by Major Trading Partner <s
Page 57 and 58: CHAPTER 3 Domestic Consumption Over
Page 59 and 60: TABLE 3.2 India: P
Page 61 and 62: more likely to have been exposed to
Page 63 and 64: BOX 3.3 Indian Con
Page 65 and 66: TABLE 3.3 India: T
Page 67 and 68: are expected to see income growth <
Page 69 and 70: Food Preferences India</str
Page 71 and 72: Regional Variation Geographic <stro
Page 73 and 74: CCC. “Know India
Page 75 and 76: CHAPTER 4 Indian A
Page 77 and 78: For most crops, however, In
Page 79 and 80: The Farm Sector soybeans 29 —but
Page 81 and 82: Food processing in India</s
Page 83 and 84: BOX 4.1 The Central Government’s
Page 85 and 86: BOX 4.2 Does the Minimum Support Pr
Page 87 and 88: August 3, 2009, New Delhi announced
Page 89 and 90: known as zamindars, have doubled or
Page 91 and 92: that the PFA Act was strictly enfor
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———. Bharat Nirman: A Time-Bo
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Organisation for Economic Co-operat
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CHAPTER 5 TARIFFS Overview
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sensitive. They include vegetable f
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wholly milled rice and</str
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The Indian governm
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India also reporte
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Reference Prices Reference prices,
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Landing Fees <stro
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Simulated Effects
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and nuts” by $0.
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5-19 TABLE 5.4 India</stron
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Bibliography Acharya, Keya. “Thor
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Indian Express.com
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CHAPTER 6 Nontariff</strong
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foreign sources. 6 For example, SPS
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BOX 6.1 Milk and M
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BOX 6.2 Wheat—Continued Yet, <str
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perpetuated continuously. The impor
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notices that must be integrated wit
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import corn under the TRQ is too bu
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Customs Procedures India</s
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Corruption Interests within <strong
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TABLE 6.2 India: E
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Bibliography American Apparel <stro
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Mattson, Jeremy W., Won, W. Koo, <s
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———. 2009 National Trade Esti
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TABLE 7.1 India: C
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First Point of Sal
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Private mandis Som
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approximately 65 million households
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7-10 TABLE 7.2 India</stron
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poor communications infrastructure
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limited popularity with farmers bec
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The lack of infras
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found that 39 percent of</s
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Bibliography Banerjee, A. Dairying
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Tiwari, Shri Rajendra Kumar. “Pos
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FDI Regulations and</strong
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TABLE 8.2 India: A
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Food Processing and</strong
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There is not necessarily a strong l
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For processing of
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BOX 8.3 Restrictions on Foreign Joi
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Under certain circumstances, FDI ca
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commenced. States tend to be quick
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Bibliography Bahn, Niti, an
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International Center for Alcohol Po
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Structure of the <
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BOX 9.1 The UPOV System for Plant V
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that the public sector in I
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Whether this situation will soon ch
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The U.S.-India Bus
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eggplant, which began field trials
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Maskus, Keith E. “Intellectual Pr
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APPENDIX A REQUEST LETTER
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The Honorable Sham L. Arano
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cprice-sewell on PRODPC61 with NOTI
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APPENDIX C HEARING WITNESSES
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ORGANIZATION AND WITNESS: Tuttle Ta
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Summary of Views <
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advertising and pr
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highest in the Asia-Pacific region.
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to U.S. exports to India</s
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transparent sanitary regulations th
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hotel and catering
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Western Pistachio Association 26 In
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APPENDIX E POTENTIAL FOR U.S. AGRIC
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E-4 TABLE E.1 India</strong
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Page 240 and 241:
Page 243:
APPENDIX F INDIAN AGRICULTURAL PROD
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TABLE F.1 India: A
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FIGURE F.1 India:
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is in nonirrigated areas with yield
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Consumption India
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efrigeration. This characteristic i
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70 percent of tota
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eportedly preferred in southern <st
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Cotton During MY 2003/04-2007/08, <
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Government of <str
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APPENDIX G UNION AND STATE/UNION TE
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certain agricultural goods in the p
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Bibliography Chaulan, Shri U.K. “
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Simulation Framework The effects <s
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Producers determine the optimal sup
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Applied ad valorem tariff equivalen
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We considered the possibility that
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Estimation of <str
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Bibliography Anderson, Kym, Mariann
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