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New US Unfair Competition Laws will not hamper Indian trade: Commerce Ministry
The US law against 'unfair competition' will not affect the Indian trade as we are the innovators and bringing new software for the requirement of Indians, simply by stopping the outsourcing, US economy can recant certain things which is also felt by US economist themselves, said Dr EMS Natchiappan, Minister of State, Commerce & Industry at an event organised by industry body Assocham.

"By stopping the US out-sourcing, they are stopping the Americans also not getting the jobs. Therefore Obama's policies on that issue are reviewing and rethinking it. A small slump which we suffered actually will not be there in the month's time," said Dr. Natchiappan while inaugurating an Assocham Seminar on Emerging Opportunities for Indian Manufacturing Exports in light of US Unfair Competition Act (UCA).

Declining export share of manufactured goods from 89.1% to 74.2% during last two years has become the cause of concern both for the exporters as well as the Indian Government considering US as one of the prime export market. This decline in share is specifically visible in sectors like textiles, leather and leather manufactures, plastics, glass and glassware etc.

Exporters from India have been facing tough competition with China vis-à-vis exports, where China captures almost 19.5% share of total US imports as compared to India’s share of only 1.6% share, said Dr Tamanna Chaturvedi, Consultant, Centre for MSME Studies Indian Institute of Foreign Trade.

Unfair Competition acts and laws enacted in various states of the US prevents US buyers/importers from buying any product manufactured out of pirated versions of software or hardware used anywhere in its systems. This would mean that if your company uses pirated software or hardware, not only in any one step alone but anywhere in your business and sells the parts to a US Company to become part of a larger product, the US Company becomes liable for damages and such an exporter would face state action, said Dr Chaturvedi.

Therefore, the sustainability of the competitive edge attained by these countries via in-depth technological interventions remains questionable under this law if the same has been found to be pirated. However, at the same time this law on IT compliance in USA brings forth new business opportunity for Indian exporters of manufactured goods.

Dr. K. Rangarajan, Head, Centre for MSME Studies at Indian Institute of Foreign Trade (IIFT) observed that this law has ushered a new era of new rules in the US market for any exporter. Given the dependence of manufacturing sector on IT systems, genuine software will become a critical factor to recon for competitiveness. As the piracy rates of software in India is less than some of the countries competing for the US market, there lies the opportunity for the Indian exporters.

"Unfair Competition Acts (UCA) may result into shifting priorities of the importers towards IT compliant firms/countries, a clear advantage to Indian exporters of the manufactured goods lies in legalizing and being IT complaint in comparison to countries where the import shares in the US market is low paralleled with high rates of piracy. Software piracy rates in India are at 61% compared to China’s whooping rate of 79%," reveals the study titled 'Emerging Opportunity for Indian Manufacturing exports', jointly released by Assocham and Indian Institute of Foreign Trade (IIFT).

The report adds, "Thus Indian exporters have greatest advantage to countries including Philippines, Indonesia, Vietnam, Nigeria, Iraq, Thailand & Russian Federation and emerging opportunity against China and Venezuela. The sectoral analysis highlights priority of IT compliance in those sectors/products which are currently being supplied to the US from countries including Australia, Korea, Brazil, Chile, Columbia, Mexico, and other EU countries including France, Germany, Sweden, Switzerland, UK, Spain, Korea having much lesser piracy rates."

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