“Adaptability will be necessary for trade negotiations with regional blocs to be successful,” Montek Singh Ahluwalia says

We must first acknowledge that our tariffs are significantly higher than those of the majority of other nations and that, for our own benefit, they should be lowered. On some of the concerns that lie behind the border, we should also be willing to reach a consensus. It goes without saying that we must safeguard our national interests, but we should carefully examine what is best for our country. Procedural grounds like “we have always opposed including behind the border issues in trade agreements” should not be used. Mercosur and the EU just concluded a free trade agreement. It covers a number of non-tariff concerns. Why can not we do it if they can?

Pharmaceuticals exports to the US matter for India as do the supply of low-cost generics for the US. The Indian pharmaceutical industry has been pitching for building on this and aims to double the trade to $500 billion or the Mission 500, as it is being called. What is your view on the approach to negotiations here?

Thus far, we have performed well in this crucial area. Our interests in this field should be safeguarded by the bilateral agreement, I hope. We are strong at creating generics, and the US health system needs high-quality generics to keep costs down. Although the US pharmaceutical business is highly powerful, many of its stances are hostile to US consumers.

Beyond the US, the market for affordable medications in poorer nations is also crucial. We are in a good position to provide the many medications that are coming off patent. At home, we need far more robust quality control.

The fact that China is now producing more active medicinal components is a major shortcoming in this field. This change is a result of both China’s ability to manufacture on a large scale and the government’s increased support for its producers. We must lessen our heavy reliance on Chinese API imports at the moment. The imposition of an anti-dumping duty can deter imports from China. We ought to have a well-thought-out PLI plan in this field as well. When I say “well designed,” I mean a plan that is clear about the conditions under which help will be given.

In order to provide land and address environmental concerns and pollution norms, we also require a lot more supportive policy. The Center should collaborate with the states to establish API production zones in which the states supply land at appropriate locations, the Center funds the construction of necessary infrastructure, particularly to enable effluent treatment, and the two parties jointly coordinate on environmental and pollution standards.

From the perspective of supply security, relying on domestically produced APIs may result in higher pharmaceutical input costs than if we remained dependent on China. But it is also critical to make sure that the Drugs Price Controller permits the higher costs under the price control that is placed on formulations. Therefore, several things must come together.