India is seeking concessions for generic drugs it exports to the United States in return for opening its dairy markets and slashing tariffs on farm goods as the two sides seek to shore up a new trade deal, three sources said.
India accounts for 40% of U.S. generic drug imports, including the anti-malarial hydroxychloroquine, touted by U.S. President Donald Trump in the fight against the coronavirus.
To win preferential treatment on pharmaceutical exports, the government of Prime Minister Narendra Modi is dangling the carrot of opening its dairy and farm markets to the Trump administration, months ahead of the U.S. presidential election.
India, one of the world’s largest consumers of dairy products, has offered an opening to U.S. dairy imports through a quota-based system, two of the sources said. These products would need a certificate they are not derived from animals that have consumed feeds that include internal organs, blood meal or tissues of ruminants because of religious sensibilities in India.
India’s trade ministry did not immediately comment and the U.S. Embassy in New Delhi referred questions to the U.S. Trade Representative.
The two sides have been negotiating a limited trade pact for more than a year aimed at restoring zero tariffs on a range of Indian exports to the U.S. under its Generalised System of Preferences that the Trump administration withdrew last year, citing lack of reciprocal access to India’s markets.
But the Indian side has proposed a more ambitious deal than just focused on the GSP, a second source said. In addition to luring American dairy producers, it has offered to roll back tariff hikes on almonds, walnuts and apples.
It is the world’s largest buyer of U.S. almonds, and second largest for its apples.
Indian Commerce Minister Piyush Goyal and U.S. Commerce Secretary Wilbur Ross expressed support for concluding an initial trade package and the possibility of an eventual Free Trade Agreement, the Indian government said.