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Sitharaman discusses social security pact, IPR at Indo-US trade forum

India discussed the Totalisation Agreement for IT Professionals in America, Generic Drug User Fee Act, Food Safety Act and IPR at the 10th India-US Trade Policy Forum meeting.

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Nirmala Sitharaman
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India, on Thursday, "strongly" urged the US to engage in negotiations for the Totalisation Agreement or Social Security pact as its absence is restricting the movement of domestic IT professionals in America. The issue of Totalisation Agreement was again taken up during a delegation-level meeting in New Delhi between the two nations. US Trade Representative Michael Froman is leading the delegation for the 10th India-US Trade Policy Forum (TPF) meeting.

"We very clearly identified this as one of the non-tariff measures...which is restricting the movement of IT professionals. "We have strongly urged the US to engage in negotiations for signing of a Totalisation Agreement. It is being heard and I hope there will be a positive response from their side," Commerce and Industry Minister Nirmala Sitharaman told reporters after the delegation-level meeting. India wants early conclusion of the social security agreement with the US.

The US has entered into Totalisation Agreement with several nations for the purpose of avoiding double taxation of income with respect to social security taxes. Under this agreement, professionals of both the countries would be exempted from social security taxes when they go to work for a short period in the other country. On the issues related to intellectual property rights, Sitharaman said a lot of effort was put in to dispel the misconceptions of the US delegation on India's patent regime. There seems a much better appreciation of India's IPR regime by the US side, she added.

On compulsory licensing (CL), she said India reminded the US delegation that so far it has issued only one CL and that too after following a due process. Under the CL, a government authorises a company other than the patent owner to produce the patented product or process, without the patent owner's consent. This is largely resorted to in the case of public health emergency to make an expensive patented drugs available. India issued CL in 2014 to NATCO for a cancer drug. US pharma companies have raised concerns over this.

The Indian side also raised concerns over visa fee issue. "They heard us on this and I hope they will come to us on this," she said. Further the minister also flagged matters related to greater market access for agri goods like grapes and mangoes and pharma products. "We find that in the US administration new laws are brought up and new rules are made and they have different impact on our trading, particularly I am referring to in the case of food and drugs," she said.

She said the Generic Drug User Fee Act (GDUFA) and Food Safety Modernisation Act of 2011 have started creating an elaborate system of inspection as well as inspection fees. Raising concerns about the GDUFA and Food Safety Modernisation Act, Sitharaman said: "We think it goes against small (Indian) exporters who really cannot afford that kind of fee and it hits SMEs badly". India insisted for its review so that accreditation systems are far more institutionalised and a graded fee structure is brought in "otherwise the expenses cannot be borne by SMEs or smaller players," she said.

The issues were raised by India during the TPF meeting. Talking about exports of agri items from India, she said mango exports have been doubled to the US. America has recognised two irradiation centres - Vashi and Bengaluru - and "now we are also trying to get more irradiation centres so that mangoes from North India can also be exported to the US". Further, she said India called for greater institutionalised mechanism for food safety clearances. "We emphasised on the need to adopt a more system-based approach wherein there is a mutual recognition that each others' conformity assessment processes and procedures are in line with the international practice," she said. India, she said, does not want a mechanism that is typical to the US or India. "We have been pressing for recognising NPPO's (National Plant Protection Organisation) credentials for supervising the irradiation of mangoes," Sitharaman said.

On grapes, the Indian side stated that there would be a shortage of the fruit in the global markets so the US should fast track the process of importing it from India. "Since 2008, we have been talking on grapes and there has been no movement forward. So we highlighted this. We requested to expedite the EPA (Environmental Protection Authority) review process," she said. On rice exports, Indian officials touched upon the issue of indifference on the part of multinational pesticide companies. "Countries like us, who are cautious, suffer because MNC pesticide firms do not apply for registration or do not record the failed data. As a result of this, questions are asked to exporters rather than the MNCs which are supplying these field based pesticides," she said.

Talking about market access issues related to pharma particularly the Ayush medicines, she gave the example of Switzerland, which has passed an Act where Ayush pharma has been given recognition. Switzerland has also stated that the patients who use Ayush and who benefit from that treatment will be covered by their national insurance scheme, the Minister said. "The same is going to happen in Italy soon. So if Switzerland and Italy have come forward to pass a legislation on it, the US should also be open to this," she said adding a lot of traction on this matter is there in the working groups of TPF.

On IPR, India reaffirmed that its regime is compliant with WTO norms. "We made it clear that we have taken proactive measures to bring in a greater awareness among our people on IPR," Sitharaman said. Citing a UN report, the Minister said that it clearly vindicates India's position on IP-related issues, particularly in the health sector. "We drew the attention of US delegation on the report...It also raises issues as how countries will and should have to make full use of the policy space available to them in a TRIPS compliant manner," she added. Sitharaman said that on account of the issuance of compulsory licensing also, this report vindicated India's position. "We also reminded them that a German court has granted a CL to a US company," she said adding "they should be aware that many countries are invoking the CL provisions and India issued only once. So there is no sense of suspicion or worry".

Further, the US side sought greater market access for their cherries and boric acid. "We are happy to open up provided they comply with our food safety standards," she said. On boric acid imports, she said its imports are governed by a Kerala court order which expects each of the trader to give a certificate as to who the end user is going to be. "And for the Americans, it was the perception that it is a condition which we are imposing on them only because the import is coming from the US which is not true. It is a High Court order, it is the requirement for everybody," she added. When asked whether India got any assurance from the US side on resolving visa fee issue, she said: "Assurance, I would not say, but certainly they heard it and the working groups are working intensely on it. On the visa fee, they are moving forward and I hope some progress will come out". FDI from the US to India has increased from $806 million to $4.2 billion in 2015-16.

On the concept note floated by India in WTO on starting negotiations on trade facilitation agreement in services, the Minister urged the US to accept and cooperate with India on the matter. She added that India raised the issue of promoting US investments and bringing and transferring technology in sectors like electronics, defence and medical devices. Speaking at the media briefing, DIPP Secretary Ramesh Abhishek said that India has offered the US "that we can have a mechanism here with their chamber of commerce on regular engagement with their companies who are in India to address their problems that they may have with various departments, regulators or states". This mechanism has worked quite well with other countries and "we would like to address the problems of US companies as well", he added.

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