China, India clinch deal to reduce tariffs on Indian medicines, anti-cancer drugs

China has announced that it has clinched deal with India on reduction of tariffs (import duties) on Indian medicines including anti-cancer drugs. However, it is not yet clear whether it has agreed to grant licences to Indian companies to sell cancer drugs in its huge market.

Key Facts

Indian drugs, especially cancer-curing medicines are in big demand in China as they are far cheaper than their western counterparts. Earlier in May 2018, China had lifted tariffs on the import of cancer drugs. But it had failed to enthuses Indian pharmaceutical companies as they are not legally able to market their drugs in China as it requires licence from the country’s food and drug administration.
In recent times, China has announced series of measures to expand its economy by opening up it to outside world and actively expand imports to uphold free trade global regime and as measure to fight against protectionism. It also earlier had announced to cut on import duties on over 8,500 Indian items as part of measures under to relax taxes on more goods from India and other countries to absorb impact of trade war with United States (US) which has heated up.

Background

India has been demanding the opening of China’s IT and pharmaceutical sectors as part of measures to reduce a US $51 billion trade deficit in over US $84 billion bilateral trade. Both countries have stepped up negotiations for Chinese imports of Indian rice, sugar and pharmaceuticals after informal meeting between Prime Minister Narendra Modi and President Xi Jinping in Wuhan.

Month: Current Affairs - July, 2018