India US trade package: Trump administration insists on removal of price caps on stents

By: | Published: September 3, 2018 2:40 AM

The US is learnt to have renewed its demand for the removal of price controls imposed by India on certain medical devices, as part of a broader trade package the two countries are currently negotiating, sources told FE.

India US trade package: Trump administration insists on removal of price caps on stents

The US is learnt to have renewed its demand for the removal of price controls imposed by India on certain medical devices, as part of a broader trade package the two countries are currently negotiating, sources told FE.

Commerce secretary Anup Wadhawan held talks with American trade officials recently in the US on the trade package, as the deadline set by New Delhi to retaliate against the Trump administration’s extra tariff on Indian steel and aluminium approaches.

It was the first such high-level meeting after India last month deferred its $235-million retaliation plan against 29 American goods by 45 days to September 18.

The move was aimed at giving more time to Washington for a meaningful outcome to the ongoing bilateral trade negotiations.

While a waiver from the extra duties on the metals is still being pushed hard by New Delhi, among others, the US is vigorously pursuing the medical devices matter. It is particularly interested in India removing price cap on bioresorbable stents. India is a large market for stent makers and it imported medical instruments, including stents, worth around $1.6 billion from the US in the last fiscal, up 10% from a year earlier.

To carry forward the negotiations and set the stage for the annual trade policy forum meeting between the two countries later this year, deputy US Trade Representative Jeffrey D Gerrish will soon visit New Delhi, said one of the sources.

The meetings between the two sides are being held amid an escalation of the global trade war, with the US and China having already imposed additional tariff against each other. Both India and the US will hold the so-called 2+2 dialogue this week, which is aimed at further cementing strategic and defence partnership.

As part of the trade package, while India wants an exemption from the additional duty on its steel and aluminium, the US is also seeking to use a special tariff regime– generalised system of preference (GSP)— it offers to India and some others to extract greater market access from New Delhi and reduce a trade imbalance.

For India, greater access to the American market in food, farm, engineering goods, auto and auto parts segments hold promise in the long term (over five years). The US sees good prospects for its companies in Indian civil aviation, oil and gas, education service and agriculture segments.

India made up for just 2.8% of US goods trade deficit in 2017 and occupied the 9th spot in the list of nations with which the Trump administration seeks to pursue a trade balance agenda. However, India is the only major country whose goods trade surplus with the US narrowed in 2017–a fact New Delhi has been highlighting in its talks with Washington.

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