India seeks new preferential treatment from US on drugs, other goods

India is seeking concessions for generic drugs it exports to the US 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 per cent of US generic drug imports, including the anti-malarial hydroxychloroquine, touted by US President Donald Trump in the fight against Covid-19.

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 US presidential election.

“Americans recognise the political compulsion that brings its own benefits,” one of the sources with knowledge of the plans said.

India, one of the world’s largest consumers of dairy products, has offered an opening to US 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 federal trade ministry did not immediately comment and the US Embassy in New Delhi referred questions to the US Trade Representative.