(Reuters) - India has arrived at an interim settlement with the European Union (EU) on how to prevent seizures of its generic drugs on EU soil, a senior trade ministry official said on Thursday.

"We have agreed to an interim settlement with the EU," Rajeev Kher told reporters.

Guidelines will now be issued to officials in all the EU's 27 states on letting Indian drugs pass, Kher said. The EU will also put the amendments before its parliament.

India and Brazil brought a case to the World Trade Organisation (WTO) in 2009 saying the EU was wrongly stopping and inspecting shipments of generic drugs in transit. Some shipments were turned away rather than allowed to continue to their final destination, they said.

India had agreed to resolve the dispute with the EU, its largest trading partner, in December but in subsequent months it has been trying to iron out differences on how EU customs officials should treat Indian pharmaceuticals, Kher said.

However, India is not fully satisfied with an initial draft of such amendments to parliament and New Delhi reserves its right to restart the case if the EU parliament waters down Indian demands, Kher said.

"We will wait for the final settlement," Kher said. "We have not lost our right to agitate the matter again."

July 28, 2011

Source: Reuters