Context:
The 14th ministerial-level meeting of the India US Trade Policy Trade Policy Forum (TPF) was held in New Delhi.
Bilateral Trade Surpasses $200 Billion Amid Global Uncertainties: Key Meeting Highlights
- Strengthening Bilateral Trade: Despite global trade uncertainties, trade momentum remains strong, exceeding $200 billion in 2023, a significant achievement of India US Trade Policy.
- India US Trade Policy Forum (TPF): Established in 2005, TPF discusses market access and trade-related matters.
Key Achievements in India US Trade Policy Forum 2023
- Prioritising Sectors: Focus on identifying priority sectors for joint initiatives, with a Joint Facilitative Mechanism to be established.
- Marine Trade: The finalised Turtle Excluder Device (TED) design paves the way for field demonstrations in February 2024.
India US Trade policy and Economic Relations:
- USA is India’s largest trading partner with bilateral trade in goods and services crossing US$ 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.
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- 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.
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- 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.
Trade Concerns and Opportunities in India US Relations
- 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.
Fostering Collaboration: Key Discussions in India US Trade Policy Forum
- 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.
Future Prospects: Ongoing Dialogues and Anticipated TPF Meetings in India-US Trade Relations
- 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
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January 13, 2024