new delhi, May 28 -- As trade negotiations between India and the US move towards finalization, the pharmaceutical sector is at the heart of a significant give-and-take between the two countries. According to two people familiar with the matter, India's proposals include supply of low-cost complex generic medicines at reduced costs, patent reforms to allow earlier entry of generics in the US, increased US-based manufacturing by Indian pharma firms of active pharmaceutical ingredients (APIs) and fixed dosage forms (FDFs) and tariff exemptions for life-saving and critical medicines imported to India from the US. An API is the main component of a drug (think paracetamol), while an FDF is a combination of two or more APIs in one drug, like a tablet with both paracetamol and ibuprofen. India's offer comes in the backdrop of the US administration's desire to sharply cut local drug prices and gains significance as every second prescription in the US has a generic drug made by an Indian company. Amid the US push to bring pharmaceuticals under its reciprocal tariff regime, India has proposed to supply complex generic medicines at 20-25% of current branded prices for the first three years after patent expiry. An additional 10-15% cost reduction will follow over the following seven years, the people cited above said on the condition of anonymity. "Along with the pricing commitment, India has proposed allowing final stages of drug processing-including semi-finished and finished dosage forms-to be done in the US under the Trump administration's 'Make in America' push," said the first person cited above. "In return, India has sought targeted incentives for its pharma firms willing to set up API and formulation facilities in the US." Other countries are reluctant to invest in US-based manufacturing of low-cost generics unless the products are high-value or there's a supply gap. "India has effectively mastered this space," this person said. The second person said that in patent reform, Indian negotiators have suggested an end to "evergreening" by US pharma companies and a reduction in patent exclusivity from India's end-steps they claim would significantly lower drug costs....