$1.5bn credit for drug exports to African nations

Following the agreement on compulsory licensing at the World Trade Organisation (WTO), India is considering opening a line of credit of $1.5 billion to support HIV-related medicine exports to African countries.

Speaking at a seminar organised by the Federation of Indian Export Organisations (Fieo), R Vishwanathan, joint secretary in the external affairs ministry, said talks had been initiated with the finance ministry to open the line of credit to be made available over a five year period.

Last year, the WTO membership agreed to waive patent requirements for the supply of medicines to poor countries combating epidemics but without manufacturing capabilities.

Vishwanathan also said the government was planning opening a line of credit under 'equalisation of interest scheme' to extend credit to governments, banks and other agencies in importing countries at 0.5 per cent over the London Interbank Offer Rate (Libor) to push India's exports.

He said government-to-government lines of credit would be reduced and more lines of credit would be routed through Exim Bank and commercial banks.

Describing free trade agreements as one of the most significant initiatives in promoting regional trade, he said the government was taking steps for FTAs with Mercosur, Mauritius and South Africa.

Speaking at the meeting, SN Menon, special secretary in the commerce ministry, said the international trading system needed to be made more predictable in the wake of a spurt in non-tariff barriers to trade.

"Multilaterally, tariffs have come down and have been replaced by non-tariff barriers.... There is a need for more transparent and predictive systems across the globe," Menon said. There was a need for bilateral dialogues between trading partners for better understanding of each others' needs, he added.

Menon said the country had proactive interests in services, especially Mode 1 (cross-border supply of services like business process outsourcing) and Mode 4 (movement of persons) as also in industrial goods.