India, US trade mangoes for
motorcycles By Indrajit Basu
KOLKATA - Mangoes and a macho motorcycle
brand are the latest diplomatic tools for
improving India-United States trade relations.
That's the trade deal Indian Commerce Minister
Kamal Nath and US Trade Representative Susan
Schwab thrashed out late last Friday in a
bilateral trade forum in New Delhi. Experts say
the move has taken India's reform process a step
ahead and removed yet another thorn in trade
relations with the US.
After a year of
bickering, India finally agreed to import iconic
Harley Davidson motorbikes with an engine capacity
of 800cc and
above, which adhere to
Euro-III emission norms. To reciprocate this
relaxation, the US agreed to allow the import of
Indian mangoes, subject to Indian farmers using
irradiation to kill pests instead of using
pesticides, which make imported food products
unfit for consumption in the eyes of US
agriculture officials.
"Mango exports to
the US assumes a big symbolic significance, as
access to the global marketplace will benefit
Indian farmers and consumers, together with their
American counterparts," said the Washington
DC-based US-India Business Council (USIBC), while
in a comment to the press its president, Ron
Somers, said: "Trade must be a two-way street." He
added that as the Indian economy will benefit by
the expanding trade opportunities in US
agricultural products, "US industry appreciates
that the economic reform process will be accessed
and shared by all" and that this also brings down
trade "barriers" and improves relations between
the countries.
Indeed, the
mangoes-for-Harley Davidson deal is a curious case
of how trade problems can be created and solved
over two consumer favorites. While Indian mangoes
are widely regarded as the most luscious and have
been exported to Europe and the Middle East for
years, the US did not allow the fruit to be
imported from India, citing lack of compliance
with Food and Drug Administration requirements.
That not only hurt India's pride but also deprived
over 2 million Indians living in the US of their
favorite fruit.
Therefore, as if to hit
back, when the Milwaukee-based bike brand - that
enjoys cult status yet is struggling to revert to
its former financial glory - sought entry into
Indian markets around July last year with a
request for a lower import duty and easier
emission norms, Indian authorities struck back by
sticking to their policies.
Meanwhile,
even as the visit of US President George W Bush to
India in March last year cleared the import of
mangoes in exchange for India allowing US farmers
to access local markets with their pulses (beans
and peas) and almonds, Indian mangoes failed to
reach US shores, reportedly owing to India's tough
stand on Harley imports.
However,
according to its claims, USIBC efforts succeeded
in breaking the ice, with India agreeing to relax
its norms by way of just an approval certificate
(that the bikes adhere to Euro-III emission norms)
from an international accredited agency, instead
of an elaborate registration process. The US
agreed to allow mangoes onto its shores provided
India allows pre-shipment inspections by US
officials (paid for by Indian exporters) to ensure
the absence of pesticides.
"After a gap of
18 years, mangoes can finally be imported to the
US, and we [will] get to feast on this delicious
fruit that many of us grew up with in India," said
Kamala Bhat, a writer of Indian origin who has
lived for many years in the US, in her blog. "The
mangoes that you find in the US are pale in
comparison to the flavorful ones from India. Every
time I have caved in and bought a mango in the US
it has been a deeply unsatisfying experience."
According to the USIBC, the import of
mangoes has a huge commercial significance as well
since Indian varieties are likely to dominate the
250,000 ton a year US market. "Since the news
about the possibility of the import of Indian
mangoes to the US appeared, we have been getting
frequent queries from specialty grocery stores as
well as transporters," said a spokesperson from
the USIBC to the Press Trust of India news agency.
Although mangoes have never been hot
favorites in the US, in recent years the fruit has
gained in popularity following import from mainly
Mexico. But US consumers say Mexican mangoes
hardly taste as good as their Indian counterparts.
Therefore, to push the country's "wonder
varieties", the USIBC has even planned the
first-ever "Indian Mango Tasting Festival" at its
Global India Summit in Washington from June 27.
The mangoes-for-Harley deal paves the way
for the entry of not only Harley Davidson but also
many other high-end famous bikes from companies
including Yamaha, Suzuki, Honda, Ducati and
Triumph. But unlike the prospects of mangoes in
the US, the motorcycles are not expected to be a
big hit with Indian consumers. That's because
while India has agreed to relax its emission
norms, it has so far refused to lower the import
duty (of 60% on landed price-manufacturer's price
plus shipping costs) on high-end bikes, which will
mean that a Harley cannot be bought for less than
$17,000.
"That's higher than the price of
a medium-sized car [like the globally known Honda
City] and at that price a Harley [and others
high-end ones lined up for India] will compete
with cars and not motorbikes," said a spokesman
for one of the largest bike makers in India,
requesting anonymity.
"India may have a
market for luxury cars [like Rolls-Royce, Mercedes
Benz and BMW] but that, too, is tiny. I am not
sure if the country is a hot market yet for
motorbikes, the price of which can fetch a car
that features higher in the aspiration-index."
This bike maker tried selling a famous German bike
for about $11,000 each a few years back, but had
to withdraw it from the market after selling only
about 250.
Nevertheless, it appears that
Indian mangoes may have opened up US grocery store
shelves for many other farm products from India.
According to Schwab, who visited other organic
farming units in the country, the US is trying to
learn more about India's farming processes and "is
looking for opportunities in food and agricultural
products".
Indrajit Basu is a
Kolkata-based journalist.
(Copyright
2007 Asia Times Online Ltd. All rights reserved.
Please contact us about sales, syndication and republishing.)
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
