U.S. flags concern over India trade barriers

NEW DELHI (Reuters) - Commerce Secretary Gary Locke on Tuesday flagged U.S. concerns that India's complex system of import tariffs, "opaque" foreign investment rules and non-tariff barriers were slowing bilateral trade and investment.

Improving commercial ties between India and its third-largest goods trade partner came into focus during U.S. President Barack Obama's visit to the South Asian giant, which helped seal deals worth $10 billion and 50,000 new American jobs.

Despite India's growing global weight, it is only the United States' 14th biggest trading partner and obstacles, from outsourcing controversies to market access to the Doha world trade round, have put the brakes on faster integration.

"As I talk to American business leaders who are looking to expand their presence in India or enter the Indian market, the overriding concern that I hear is India's systems of tariffs and other import charges are overly complex," Locke said.

Speaking at a business function at the end of Obama's visit, Locke talked up bilateral trade opportunities for India and the United States in sectors like energy, infrastructure and medical equipment.

"Even as tariffs come down in some items, non-tariff barriers have proliferated," Locke said.

The United States and India need each other to meet ambitious export targets amid a sluggish U.S. economic recovery, yawning trade deficits with China and fears global imbalances may spark a standoff.

Greater access to Indian markets has been a long-standing demand from Washington and both sides have in the past accused the other of obstructing faster trade growth.

Disputes over market access between developed and developing nations are a core part of the slow-moving Doha round of world trade talks.

U.S. companies also want Asia's third-largest economy, with its market of 1.2 billion people, to lift restrictions on foreign investment, especially in multi-brand retail and defense.

India has in the past rebuffed talk of its trade policies as protectionist and highlighted its moves toward trade deals with the likes of the European Union, Japan and Malaysia as evidence of its commitment to opening up its markets.

Speaking after Locke, his Indian counterpart Trade Minister Anand Sharma said India was "against protectionism of any kind" and said India and the U.S. should consider a trade pact.

He also said India had not reached a firm decision on whether to open up its multi-brand retail sector.

(Editing by Bryson Hull)