India US Trade Policy Forum Charts Path For $200 Billion Trade: Achievements And Future Endeavors

Context:

The 14th ministerial-level meeting of the India US Trade Policy Trade Policy Forum (TPF) was held in New Delhi.

Strengthening Bilateral Trade: Despite global trade uncertainties, trade momentum remains strong, exceeding $200 billion in 2023, a significant achievement of India US Trade Policy.
India US Trade Policy Forum (TPF): Established in 2005, TPF discusses market access and trade-related matters.

Prioritising Sectors: Focus on identifying priority sectors for joint initiatives, with a Joint Facilitative Mechanism to be established.
Marine Trade: The finalised Turtle Excluder Device (TED) design paves the way for field demonstrations in February 2024.

India US Trade policy and Economic Relations:

USA is India’s largest trading partner with bilateral trade in goods and services crossing US$ 191 billion in 2022.
In 2022 bilateral merchandise trade reached US$ 133 billion and services trade reached around US$ 58 billion (Source: US Census data).
During 2022-23, the US was the third largest source of FDI into India with inflows of US$ 6.04 billion accounting for almost 9% of total FDI equity inflows.

Public Health: Emphasis on enhanced cooperation to ensure safe and effective medical products, with India seeking more US FDA inspections.

Trade Margin Rationalization (TMR): It is a mode of price regulation by way of capping trade margins in the supply chain.

This is the difference between the price to trade by manufacturers and price to patients i.e., Maximum Retail Price.

- The Ministers acknowledged the ongoing discussions on ensuring patient access to affordable medical devices, including through the Trade Margin Rationalization (TMR) approach.
Supply Chain Resilience: Collaboration on India’s new IT hardware import requirements, with a commitment to minimizing trade disruption.

The US welcomes India’s ethanol blending initiatives and offers potential supply support.
India reiterated its interest in the restoration of its beneficiary status under the U.S. Generalized System of Preferences program.
India expresses concern about a backlog of US FDA inspections, seeking faster clearances.
India has also flagged its concerns about challenges being faced by domestic businesses in getting timely visas for the US and has urged America to fast-track the process,
The US urges India to ensure its IT hardware import policy maintains trade openness.

Intellectual Property: Ongoing engagement on IP matters, including India’s patent system modernization.
Agriculture: Finalisation of market access for certain agricultural products sought.
Services: Constructive talks on digital trade, data protection, and services liberalization.
Movement of Professionals: Discussions on recognition of professional qualifications and visa processing times.
Resilient Trade: Commitment to transparent regulatory practices, eliminating forced labor, and resolving WTO disputes.

Regular engagements at various levels, including quarterly Working Group meetings and an inter-sessional TPF meeting, are planned.
The next ministerial-level TPF meeting is slated for later in 2024.

News Source: PIB