India and the US are reportedly hammering out a deal that will focus solely on tariff-related issues, with hopes of finalizing it by July, according to sources. The two countries are also expected to delve into discussions on non-tariff barriers in the next phase around October, if all goes smoothly.
Tariff Talks:
The talks aim to cover key export items, with the US looking to expand its market presence in India. However, sensitive sectors for India like dairy and agriculture are likely to be excluded from the tariff negotiations, as both countries strive to safeguard their interests. India is particularly interested in securing lower tariffs for labor-intensive export sectors such as textiles, leather, and gems and jewelry.
US Wishlist:
On the other hand, the US is keen on obtaining reduced duties for its products, including automobiles, electric vehicles, whiskey, and agricultural goods. Additionally, increased purchases of oil and defense equipment by India are among the key items on the US wishlist.
Upcoming Discussions:
Further discussions on non-tariff barriers, encompassing tech, e-commerce, and data storage, are anticipated to take place post-July. Commerce and Industry Minister Piyush Goyal, along with a team of Indian negotiators led by Rajesh Agarwal, special secretary of commerce, are currently in the US working on the proposed bilateral trade agreement.
Reciprocal Tariffs:
The US had previously imposed a 26% tariff on India under its reciprocal tariff plan but later announced a 90-day pause, set to end on July 8. India is racing against time to finalize the initial phase of the Bilateral Trade Agreement before the deadline to avoid the imposition of higher tariffs and protect a crucial export market. With bilateral trade amounting to $131.84 billion last fiscal year, the US stands as India’s largest trading partner.
Impending Deadline:
As the clock ticks towards the looming deadline, negotiations between India and the US are intensifying, with both sides eager to secure a favorable agreement. The discussions are crucial for both nations as they navigate the complexities of trade relations in a rapidly evolving global landscape.
Wrapping Up:
In conclusion, the ongoing talks between India and the US signify a pivotal moment in their trade relationship, with the potential to shape future collaborations. Despite the challenges posed by non-tariff issues, both countries remain optimistic about reaching a comprehensive agreement in the upcoming months. The outcome of these negotiations holds significant implications for the economies of both nations, underscoring the importance of a mutually beneficial trade deal.