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India has refused to wilt under US pressure for grant of market access to its dairy products and has maintained that the mandatory certification, specifying that imported dairy items were not from animals raised on feed made of bovine extracts, cannot be done away with as it was a matter of religious belief.
“Indian officials have told USTR officials that while the country was exploring how the problem arising from price caps on medical equipment could be sorted out, it could not compromise on dairy certification,” a government official told BusinessLine .
Dairy products and medical equipment top the list of items for which the US is seeking market access. The US Trade Representative’s (USTR) office has also linked market access in the two areas to continuation of Generalised System of Preferences (GSP) benefits to India under which the US allows market access at nil or low duties for about 3,500 Indian products, including chemicals and textiles
“The certification requirement is not a non-tariff barrier that we have put in place for the US. It has cultural and religious significance for the country and not abiding by the requirement could lead to sentiments getting hurt and unrest,” the official said.
Other countries such EU members and New Zealand, that are exporting dairy products to India, all abide by the mandatory requirement and give a certification that the items were from animals that were not fed on bovine meat or extracts, the official added.
Although, the US has been making the same demand on behalf of its dairy industry for a long time and is aware of the religious angle to the restrictions, it has started pushing for it aggressively in the last few months.
“In the recent meeting between Indian and US officials in New Delhi, it was decided to include the concerns on market access for dairy products and medical equipment in the list of issues that needed to be sorted out,” the official said.
A team of officials from India will visit Washington this month for a follow-up meeting with their US counterparts.
Sorting out the issue of caps on prices of medical devices will also not be easy as the alternative suggested by the NITI Aayog of rationalising trade margins has been criticised by many stating that in the absence of a cap, the purpose of rationalisation of trade margins could be defeated through manipulations in prices or introduction of new products at higher prices.
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