NEW DELHI: There were sharp differences of opinion in the Union Cabinet, on how India should respond to its placement under the Special 301 category by the United States, it is leant. The meeting called at very short notice was described as informal by some Cabinet sources, but that did nothing to bridge the gap between those in favor of a serious step against the US, and those opposed to the idea, the sources said.

The Prime Minister expressed no opinion at the meeting beyond pointing out to those who wanted a “serious step” that India had already expressed its displeasure at being placed under the 301 category in the strongest language possible within the diplomatic code. Finance Minister Manmohan Singh and Defence Minister Sharad Pawar told their cabinet colleagues that the US was bound to take note of the opposition to this classification that was expressed in Parliament from all sides of the House, and the language used by the MPs constituted a “serious step” by itself, Cabinet sources said. They did not feel that any further action at the present juncture would be in the best interest of India and reminded the Cabinet of the need for US investments in the present unipolar world, according to the sources, Pawar was reported to be quite unhappy with the demand voiced by some Congress MPs to cancel the proposed joint Indo-US naval exercise, and said that “such statements set all sorts of wrong signals, which in no way help in the lifting of the ban, It only hardens the US stand.”

The Finance ministry and the ministry of Chemicals and Fertilizers which deals with medicines prepared a position paper on the effect of duty now to be levied by the US on drug imports from India and reached the conclusion that US $3 million duty 5% of the US did not pose a significant threat to the Indian drug industry, according to sources in the Finance ministry. However the paper, which was presented at the Cabinet meeting, says that the situation would become serious if other items of export from India also came under the duty list, as had been threatened by the US wade representative Carla Hills. “That was why we recommended to the Cabinet the urgent need to reach a compromise with the US, a senior officer in the Finance ministry’s belligerent posturing will lead us nowhere,”

The Cabinet minister who was expected to voice the strongest Opposition to this line of thinking, Arjun Singh, did not attend the meeting, as he was down with a bad cold. In his absence, Agriculture minister Balram Jakhar, Railways minister C.K. Jaffer Sharif, Welfare minister Sitaram Kesari and Health minister M.I Fotedar voiced their opposition to any rapprochement moves with the US at this juncture, According to Cabinet sources they accused the US of being “unfair” by clubbing India with Taiwan and Thailand in the 301 category and held that it was the US consumer who stood to lose the most if the drugs imported from India became costlier in the American market. According to their information, some of the anti-parasitic drugs imported by the US from India were the cheapest drugs in that category in the American market, and if their prices went up, the average American consumer was likely to protest.

To this, the Finance minister is learnt to have replied that few American consumers paid for any drugs out of their pockets, since almost the entire population was covered by health insurance schemes. Overall, he said, India stood to lose much more than USA under the 301 classification. Cabinet sources said that most of the meeting was concerned with the “firefighting operation” of how to deal with the immediate problem created by the US, and there was hardly any discussion on the basic reason why India had been placed in the 301 category intellectual property rights,

Article extracted from this publication >> May 15, 1992