New Delhi: India is keen to get preferential treatment on exports of generic drugs to the US in exchange for slashing prices on farm goods and opening up its dairy markets as both countries look to sign a new trade deal, an exclusive Reuters report said.
This has been a long-pending demand of India and is also one of the reasons the US-India trade deal was stalled last year. India accounts for about 40 per cent of generic drug imports in the US, which also includes hydroxychloroquine, which was much talked about as a Covid treatment. This was why India changed its trade policy to export the drug to the US — a gesture that US President Donald Trump said would not be forgotten.
Reuters reports that in order to get preferential treatment on its pharmaceutical exports, Modi was proposing to open India’s farm and dairy markets to the Donald Trump government.
India is one of the largest consumers of dairy products, and according to the report, it has proposed a quota-based system for US dairy imports. However, due to religious sensibilities in India, the products will need a certificate that they are not derived from animals that have consumed internal organs or tissues of ruminants.
The trade deal between the two countries has been in the pipeline for more than a year, but Trump withdrew from it citing lack of access to India’s markets. The deal aims to restore zero tariffs on a range of Indian exports to the US under the GSP — Generalised System of Preferences.
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Dependence on China
President and chief executive at US-India Strategic Partnership Forum Mukesh Aghi told the news agency that the US, however, has raised concerns over India’s dependence on imports from China, with respect to sourcing raw materials for generic drugs. India relies on China for almost 70 per cent of pharmaceutical raw material for ingredients.
Aghi said, “US dependence on China indirectly is tied to India itself. And the US is saying, if you want access to our market then become more self-sufficient than being dependent on China.”
India, on the other hand, has proposed a more ambitious trade deal than the one in 2019 that focused only on GSP, according to Reuters. In addition to opening its dairy markets, it has also proposed to roll back tariff prices on almonds, walnuts and apples. India is the world’s largest buyer of US almonds, and second largest of its apples.
Both Commerce Minister Piyush Goyal and his US counterpart Secretary of Commerce Wilbur Ross expressed their desire to conclude the initial limited trade package and discussed the possibility of a Free Trade Agreement Friday.
India’s Ambassador to the US Taranjit S. Sandhu recently said both countries were discussing a smaller trade deal before following up on the full-fledged FTA.