* Government angered by threatened U.S. trade sanctions
* India violates intellectual property rights - U.S. group
* WTO now hearing 14 bilateral trade cases
(Adds comment from USTR)
By Manoj Kumar
NEW DELHI, Feb 25 India has decided to block
investigations by the United States into its trade policies and
patent laws and prepare for a battle at the World Trade
Organization (WTO), a move that could escalate already-strained
tension between the two countries.
New Delhi is furious about a threat of trade sanctions made
by the U.S. Trade Representative's (USTR) office over its
protection of intellectual property rights (IPR), preference for
domestic producers and non-trade barriers.
Ahead of a general election, Prime Minister Manmohan Singh's
government does not want to be seen as bowing to U.S. pressure,
amid lingering tension over the recent arrest and strip search
of a female diplomat in New York suspected of visa fraud.
On Wednesday, the National Association of Manufacturers
(NAM) - which represents about 50 U.S. business groups - asked
the USTR to designate India a Priority Foreign Country in its
"This designation appropriately would rank India among the
very worst violators of intellectual property rights and
establish a process leading to concrete solutions," NAM said in
a letter to U.S. Trade Representative Michael Froman.
The USTR is holding public hearings for its annual report
due in April. The report will provide details on nations denying
protection of IP rights or fair market access to U.S. firms.
India is widely perceived in Washington as a serial trade
offender, with U.S. firms unhappy about imports of everything
from shrimp to steel pipes they say threaten jobs, as well as a
lack of fair access to the Indian market for its goods.
This month, Washington said it was filing its second case at
the WTO over domestic content requirements in India's solar
programme, which aims to ease energy shortages in Asia's
There are 14 past or current WTO cases between India and the
United States, whose bilateral trade in goods measured $63.7
billion last year, not including the latest case.
India has since hardened its stance, instructing officials
not to entertain any request from the United States
International Trade Commission (USITC) - a quasi-judicial
federal agency - to examine its trade practices.
India's trade ministry has also "advised" U.S Deputy Trade
Representative Wendy Cutler to put off a visit to India that had
been scheduled for late March due to the parliamentary election
due in April or May, a senior official told Reuters.
The official said India had asked for alternative dates for
the visit, possibly after the elections, adding that the
decision was not linked with the trade tension.
A spokeswoman for the USTR said officials from both
governments continued to engage in constructive discussions on
trade and investment issues and to seek out opportunities for
further economic collaboration.
The USTR listed in a Feb. 12 report markets in Delhi, Mumbai
and Hyderabad as being among the worst offenders globally for
the sale of pirated software and counterfeit goods.
A visit by the USITC delegation to meet officials from the
Indian commerce, industry, health, telecom and finance
ministries has also been put on hold.
A USITC spokeswoman confirmed the delay, saying they were
looking for "other windows" for a visit, but declined to comment
on the reasons for the delay.
Newly appointed Trade Secretary Rajeev Kher, who pushed
India's stand on food security issues at a WTO meeting in Bali,
as chief WTO negotiator, has told his officials to tackle
bilateral trade disputes preferably through multi-lateral
India has also urged President Barack Obama's administration
not to fall prey to special interest groups and consider trade
issues in the context of the wider economic and strategic
relationship between the two countries.
Officials say any move towards putting India on a priority
foreign countries list would hurt bilateral relations.
"There are clear stresses in the India-US trade, economic
relations," said another government official who, like others
who spoke to Reuters, declined to be identified due to the
sensitivity of the matter.
"If it is a strategic relationship, they should be looking
at the larger picture."
(Additional reporting by Krista Hughes in Washington, Frank
Jack Daniel in New Delhi; Editing by Douglas Busvine, Robert
Birsel and Cynthia Osterman)