Don't mix talks on drugs & trade pact: EU to India

By Kirtika Suneja
NEW DELHI: In a likely breakthrough for India-European Union ties, the 28-nation bloc has offered to discuss its ban on 700 Indian drugs as a separate issue so that stalled talks on a free-trade agreement can be resumed.

Senior commerce department officials said the EU has shown interest in discussing the matter and suggested that the drug ban be tackled independently of the trade talks because it is a separate legal issue. “We have to see what they have in mind. As per our understanding, there was nothing wrong and they have taken a prejudiced kind of view,” a commerce department official said, referring to a communication from the EU that came a fortnight ago. The government is yet to take a call on the issue. India deferred talks on the India-EU Broadbased Investment and Trade Agreement in August after the EU banned 700 generic drugs that were tested at Hyderabad-based GVK Biosciences. In an official statement on August 5, India said it was “disappointed and concerned by the action.”




The ban was imposed after an inspection by the French medicines agency in 2014 that cast doubt on the way clinical trials were performed at the facility and therefore the reliability of data used to support the granting of licences. The Indian Pharmaceutical Alliance has maintained that the drug inspector sent by the French authorities, who claimed ECG (electrocardiogram) data of the clinical trials were manipulated, was not competent to vet such data, which is a task for a cardiologist. “The EU has talked of manipulation – that too, without any proof. They want us to prove that no manipulation happened. We have produced evidence,” the official added. The cancellation of talks was a setback to the proposed free-trade agreement that the two sides have been negotiating since 2007.

Differences over the lack of access for Indian professionals to EU’s labour market and high taxes imposed on liquor and car imports from Europe have thwarted efforts to reach an accord that is expected to boost trade between India and the EU.

India exported $15.4 billion worth of pharmaceutical products in 2014-15, with Europe accounting for $3 billion, or 20% of the total. Out of the $3 billion, generic medicines constituted about $1 billion and drug ingre thereaccounted for the rest, according to Pharmexcil.

India and the EU have missed at least four deadlines to clinch a free-trade accord, even after 15 rounds of talks. A prolonged recession in the EU and its focus on concluding the Transatlantic Trade and Investment Partnership agreement with the US also delayed the progress. India and the EU have a long history of tussles over generic drugs. India initiated dispute settlement consultations at the World Trade Organization in May 2010 after EU authorities repeatedly seized Indian generic drugs bound for Latin American and other countries. The matter was settled in 2011 and the EU agreed not to seize generic drug consignments transiting through its territory.