After securing a rare win by receiving approval to sell pork products in India, the United States is expected to seek market access to products with more consumer and industrial demand, people with knowledge of the development said.
The issue will come up in scheduled trade talks, set to be held virtually later this month, they added.
At the 12th India – US Trade Policy Forum (TPF) meeting held in November, the United States decided to offer market access for table grapes from India. India agreed to work to finalize an export certificate to allow the import of pork and pork products from the US. Now, Washington wants permission to sell products with higher levels of consumption and retail in India.
Even as discussions on a comprehensive free trade agreement with the US have slowed down under the Joe Biden administration, both nations are currently engaged in a series of talks to improve trade by reducing non-tariff barriers and promotion of goods in each other's markets.
Market access focus
Officials said market access has dominated most of the talks till now. Market access refers to the ability of an exporter to sell its goods across the borders.
"This mostly includes demands by both sides on a host of agri products. Agri items are a growing category of exports in bilateral trade between India and the United States, and has seen a series of contentious battles so far," a Commerce Department official said.
Rather than hold broad-based discussions on market access, the government has set its sight on a gradual approach that favours providing market access on select products, on a reciprocal basis.
"This model, called 2 vs 2, has been informally adopted. It has given us good results in the past as well, especially in difficult negotiations with China," the official said.
"In the upcoming talks, finalization of market access for mangoes, pomegranates, and pomegranate arils from India, vis-a-vis cherries and alfalfa hay from the United States will be reviewed," he added.
India, meanwhile, is finalizing the Veterinary Health Certificate for American pork and pork products.
Going forward, the US also wants market access for distillers' dried grain with solubles (DDGS), a byproduct of bioethanol fermentation, which uses the dry milling technology for starch-rich grains such as corn, wheat, and barley.
It is used as feedstock in the production of value-added products via microbial fermentation
India has requested market access for water buffalo meat, and the restoration of market access for wild caught shrimp.
The Department of Agriculture and Farmers Welfare and U.S. Department of Agriculture are the nodal US agencies on the issue and they are currently scrutinizing issues revolving around the inspection and oversight transfers for Indian mangoes and pomegranates.
Diminishing returns
"The US is on the lookout to secure access to more lucrative products. It may have felt underwhelmed with the agreement last time around, given the volumes in question," a senior Delhi-based trade negotiator said.
Official data shows that pork imports by India have historically been low, reaching a high of only $2.86 million, or Rs. 20.22 crore, in 2019-20, before the pandemic hit.
In 2020-21, imports came down to $1.5 million or just Rs. 11.14 crore. On the other hand, grape exports by India have stood at about $343 million or Rs. 252 crore for the past two years.
According to industry officials, around 70 percent of India's pork consumption is concentrated in the North-Eastern states, which are home to a majority of pig farms in the country.
According to estimates by the Department of Animal Husbandry in 2019, of the total 9.1 million heads of livestock in the country, the North-East was home to 4.5 million, with Assam having the highest number at 2.1 million.
However, overall pork consumption has been declining for the past decade, with the latest livestock census in 2019 counting an 11 percent fall in the pig population nationwide, compared to 2017.
The North East Progressive Pig Farmers Association (NEPPFA) has protested the latest move, arguing it would edge them out of business. Members of the NEPPFA produce 1.3 lakh tonnes of pork annually.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
