India and the US are set to hold the 14th meeting of the Trade Policy Forum (TPF) on Friday, January 12, 2024, in New Delhi. The TPF is a bilateral dialogue mechanism to address trade issues and enhance cooperation between the two countries. The meeting will be co-chaired by Commerce and Industry Minister Piyush Goyal and US Trade Representative Katherine Tai.
Pharma: Inspection and Audit of Indian Facilities
One of the key issues that India will raise at the TPF is the fast-tracking of the process of inspection and audit of Indian pharma companies by the US Food and Drug Administration (USFDA). The inspections were disrupted during the pandemic, but have since resumed. However, India wants the pace to go up to achieve at least pre-pandemic levels, so that exports of drug formulations to the world’s largest economy are unhindered. India also wants the US side to resume inspections of new facilities and non-priority areas at the earliest.
According to a study, between 2020 and March 2021 there was a complete halt to the USFDA inspections. In 2022, the drop in inspections was 79% as compared to 2019. Of the $25.3 billion worth of pharma exports in FY 23, the US market accounted for 34.8%.
Duty Relief: Restoration of GSP Benefits
Another issue that may come up at the TPF is the restoration of India’s beneficiary status under the US Generalised System of Preferences (GSP) programme. The GSP programme allows duty-free access to some Indian products in the US market. The US revoked India’s GSP benefits in 2019 on grounds that India had denied adequate access to its agricultural and dairy markets and had placed prohibitive price controls on medical devices.
Exports under GSP tariff lines or products was $8.7 billion in 2018 (GSP benefits availed only on $6.3 billion), which increased to $9.4 billion in 2019. India has raised the demand for restoration of GSP benefits again after both sides agreed to end their WTO disputes in June 2023 during Prime Minister Narendra Modi’s state visit.
Other Issues: Export Controls and Shrimp Ban
India will also raise the issue of export regulations for high-tech products and technologies by the US. India has expressed interest in being recognised as a Trade Agreements Act (TAA) designated country by the US, which would facilitate trade in certain items. A formal discussion was initiated between the two countries on this matter after Modi’s visit to the US in June 2023.
The issue of ban by the US on import of Indian wild caught shrimp will also figure prominently in the TPF meeting. The ban has been imposed on concerns that fishing for shrimps also damages other marine life, especially sea turtles. Both sides are engaged in design and approval of equipment that will minimise loss to sea turtles.
The TPF meeting is expected to address a wide range of issues that will lead to initiatives in key sectors and create momentum for expanding bilateral trade between India and the US.