US may ask India for substantial market access in ethanol: Report

The United States (US) is expected to request more market access from India in sectors such as agriculture and dairy products, ethanol, and medical devices as part of the proposed bilateral trade agreement (BTA) that both countries aim to finalize within the next eight months.

In 2024 National Trade Estimate Report on Foreign Trade Barriers, the US Trade Representative (USTR) highlighted that despite ambitious targets for blending ethanol with gasoline, India prohibits the importation of ethanol for fuel use. In addition, the DGFT restricts biofuel imports for nonfuel use to actual users. Since May 2019, the MOCI requires an import license for importing biofuels. The MOCI also requires that Indian importers obtain an import license from DGFT to import ethanol for non-fuel purposes.

In a factsheet releasedrecently, the White House stated that the US is one of the most open economies in the world, yet our trading partners keep their markets closed to our exports. This lack of reciprocity is unfair and contributes to our large and persistent annual trade deficit. It pointed that the US average applied Most Favoured Nation (MFN) tariff on agricultural goods is 5%. But India’s average applied MFN tariff is 39%. India also charges a 100% tariff on U.S. motorcycles, while we only charge a 2.4% tariff on Indian motorcycles.

The factsheet also mentions that there are endless examples where our trading partners do not give the United States reciprocal treatment. The U.S. tariff on ethanol is a mere 2.5%. Yet Brazil charges the US ethanol exports a tariff of 18%. As a result, in 2024, the U.S. imported over $200 million in ethanol from Brazil while the U.S. exported only $52 million in ethanol to Brazil.