BTA negotiations: India pushes for greater access to US organic market

Under mutual recognition agreements (MRAs) are bilateral pacts between countries, where they recognise each other's standards as well as the certification process

The upcoming discussions on the India-United States (US) bilateral trade agreement (BTA) may see New Delhi bargain for a mutual recognition agreement (MRA) to boost exports of organic products to the US, a person familiar with the matter said. 

MRAs are bilateral pacts in which countries recognise each other’s standards and certification processes, with the larger aim of reducing costs and accelerating trade.

  “India has been pushing for an MRA with the US to increase exports of organic products, such as basmati rice, tea, coffee, millets, and essential oils. There may be a push for an MRA during the BTA talks,” the person cited above told Business Standard. 

The US is India’s largest market for organic exports, followed by the European Union. Acco­rding to data from the Agri­cultural and Processed Food Products Export Development Authority (APEDA), India expo­rted organic goods worth $240 million to 

the US in FY24, while total organic exports stood at nearly $494 million.

 

India and the US have been discussing an MRA for organic products for the past few years. If finalised, the agreement would not only facilitate organic exports but also reduce compliance costs and simplify regulatory requirements.

 

Arpita Mukherjee, a professor at the Indian Council for Research on International Economic Relations, said that in the past, demand for organic products primarily came from foreign markets, with limited domestic demand in India. As a result, partner countries granted unilateral recognition to Indian certifications to enable exports.

 

“However, with the rising demand for organic products, trade partners also want to export to India. To sign an MRA, we need to streamline our import process, which requires certification agencies and laboratory testing facilities,” Mukherjee said.

 

Last month, India and the US announced their intention to finalise a mutually beneficial BTA by the end of the month. Both sides also agreed to work together to increase trade in agricultural goods.

 

The commerce department has been holding discussions with various government departments and ministries to gain a deeper understanding of sector-specific dynamics, trade intricacies, and India’s key interests.

 

Both sides will soon finalise the broad contours of the proposed trade deal.  Commerce and Industry Minister Piyush Goyal is currently in Washington to meet top officials of the new US administration and discuss various aspects of their evolving trade policy, including the scope of the BTA.