India and the US have failed to iron out differences and achieve a breakthrough on the mini trade deal.
Officially, there is no word on what led to the fall of the trade deal, but media reports suggest the Indian government’s price controls on medical devices has been one of the prominent sticky issues in negotiations between India and the US.
The US government has been pushing India to lift the price caps on coronary stents and knee implants, at the behest of US medical device manufacturers.
The medical device imports have jumped 24 percent to Rs 38,837 crore in FY19, according to the latest export-import data.
The US is the largest exporter of medical devices to India, constituting one-fifth of the pie, followed by Germany, China, Singapore and Netherlands.
India slashed prices by 85 percent and capped the trade margins for coronary stents in 2017 and followed it up with a round of price controls on knee implants.
The move hit many US companies such as Medtronics, Boston Scientific, Stryker, Johnson & Johnson, among others. Abbott managed to contain the fallout as it distributes products more directly.
Indian government defended its move, saying it was done to rein in unethical practices and trade distortion prevalent in the industry.
The government then extended the trade margin caps to cancer drugs as well and has been hinting at extending these caps on most medical devices sold in the country.
The US, which is seeking greater access to Indian markets isn’t too pleased with India’s stand. It has put India on patent violator list and revoked the preferential market access to US markets under the Generalized System of Preferences (GSP) programme in June this year.
The price control of medical devices so far has been beneficial to the patients, as healthcare expenses in India are largely out of pocket, often leading people into poverty. It needs to be seen how the logjam in trade talks will be broken in days ahead. – Money Control