Trump's trade battle with India kicked off after it refused to allow US companies to jack up prices on key medical equipment

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  • US-India trade disagreement centered around India’s refusal to allow the liberalization of pricing policies on certain key medical devices.
  • According to The Times of India, the dispute centres around the provision of two types of medical devices – knee implants and stents, devices used to ensure a passageway such as a vein remains unblocked.
  • On Tuesday, the US announced that it would remove India from the so-called Generalized System of Preferences (GSP) after several decades.

The trade scrap between the US and India which saw the latter country kicked out of a longstanding agreement was sparked by India’s refusal to allow the liberalization of pricing policies on certain key medical devices.

On Tuesday, the US announced that it would remove India from the so-called Generalized System of Preferences (GSP) after several decades.

The GSP allowed India to send around $US5.6 billion of goods to the US annually with no duties, but the Trump administration decided to end the agreement over a dispute, which saw the US accusing India of having a “wide array of trade barriers that create serious negative effects on United States commerce.”

“India has not assured the United States that it will provide equitable and reasonable access to the markets of India,” President Trump said in a letter.


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According to The Times of India, the dispute centres around the provision of two types of medical devices – knee implants and stents, devices used to ensure a passageway such as a vein remains unblocked.

In India, both pieces of equipment are classified as “essential medicine” – meaning their prices are capped. As part of a future trade agreement, the US reportedly insisted that such devices were declassified as essential, which would have allowed US medical equipment companies to come into the Indian market and sell such devices for a big profit.

The Times of India reports that India declined to make this change, saying “it had commitments to make such medical devices affordable to Indian patients.”

“In a few instances, specific US requests were not found reasonable and doable at this time by the departments concerned, in light of public welfare concerns reflective of India’s developing country status and its national interest,” India’s Commerce Ministry said in a statement.

Aside from the issue around medical devices, the Trump administration also reportedly had concerns about India’s recently enforced restrictions on e-commerce, which have seen the use of Visa, Mastercard and American Express cards in the country restricted.

India denied such concerns, saying the country is “a thriving market for US services and e-commerce companies like Amazon, Uber, Google and Facebook, with billions of dollars of revenue.”

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