Testimony Before the United States International Trade Commission

February 13, 2014

ITIF Senior Analyst Stephen Ezell testified before the International Trade Commission this Wednesday for an ITC Investigation examining the effects of India’s trade, investment, and industrial policies on the U.S. economy. Ezell’s testimony argued that India has recently begun to embrace of a range of innovation mercantilist policies including forced localization policies such as local content requirements (LCRs), compulsory licensing of foreign intellectual property, price preferences and subsidies for domestic manufacturers, market access restrictions, and barriers to foreign direct investment. Collectively, these policies constitute a coherent Indian industrial policy which seeks to bolster Indian economic and employment growth by distorting global trade and forcing investment and production to occur in India. India has erected these policies across a diverse range of sectors from information and communications technology (ICT) and life sciences to renewable energy, manufacturing, retail, and financial services. But while these policies appear to offer India short-term benefits, in the long run they will prove self-defeating, damaging not just India’s economy—including its producers and consumers—but also harming enterprises and workers in India’s trading partner countries, including the United States, and even the global innovation economy.