Recent US-China Tariff War: Opportunities for Indian Pharmaceutical Exports?

Abstract

Abstract. The inception of World Trade Organization (WTO) in 1995 was expected to reduce trade barriers across member countries on one hand and facilitate growth though promotion of international trade in merchandise products and services on the other. The subsequent WTO-led reforms deepened the globalization wave. In recent times however, the world is witnessing a phase of ‘de-globalization’, with rise in trade barriers and inwardness. The recent increase in US tariffs on Chinese exports and countermeasures imposed by China are a case in point. In 2014 India has initiated the Make-in-India scheme for deepening industrialization and facilitating exports. The current paper evaluates the possible opportunities for expanding Indian pharmaceutical exports in the US market, given the increase in tariff against Chinese products with the help of select trade indices. The analysis portrays a modest opportunity for Indian pharmaceutical exports in the US market, based on their past performance. Only six products at HS 6-digit level, based on the six indicators, are found to be enjoying competitiveness in the US market. The paper concludes that facilitating R&D in pharma segment as well as expanding the coverage of mutual recognition of standards in US may be explored as possible steps for enhancing Indian exports. Keywords. India, US, Pharmaceutical trade, Trade indices, Trade policy, Make in India. JEL. F10, F13.