(MENAFN- Kashmir Observer) New Delhi- India and the US are likely to agree on an interim trade agreement before July 8 with New Delhi pushing for full exemption from the 26 per cent reciprocal tariff on domestic goods, an official said.
The US on April 2 imposed an additional 26 per cent reciprocal tariff on Indian goods but suspended it for 90 days till July 9. However, the 10 per cent baseline tariff imposed by America remains in place.
The government official said India's endeavour to protect its sensitive sectors may entail some quota or minimum import price (MIP). Such sectors include agri goods and dairy.
Commerce and Industry Minister Piyush Goyal was in Washington earlier this week to give an impetus to trade talks. He met with US Trade Representative (USTR) Jamieson Greer and US Commerce Secretary Howard Lutnick.
In a post on X, Goyal said that he held good discussions with the US Commerce Secretary towards expediting the first tranche of India-US bilateral trade agreement.
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“Talks are moving positively. Before July 8, we are looking at concluding an interim deal before the first tranche. It will include goods, non-tariff barriers, some areas of services also like digital. We are trying that the 26 per cent additional duty and the 10 per cent baseline tariff should not be there for India,” the official said, adding that India is seeking concessions for its labour-intensive sectors such as textiles and leather.
At present, the Trump administration requires approval from the US Congress to bring tariffs below the MFN (most favoured nation) rates.
But the administration has the authority to remove the reciprocal tariffs imposed on a number of countries, including India.
India may look at certain commitments from the US on the duty concessions for its labour-intensive sector in the first tranche of the proposed bilateral trade agreement (BTA). Both countries have fixed a deadline to conclude the first phase of the pact by fall (September-October) of this year to more than double bilateral trade to USD 500 billion by 2030.
The minister-level meetings were followed by the deliberations between chief negotiators of the two countries, which will continue until May 22.
Officials from New Delhi and Washington are looking to take advantage of the 90-day tariff pause window to advance the talks. The US has suspended the additional 26 per cent tariffs on India till July 9. It was announced on April 2 to bridge the widening trade deficit.
To boost bilateral trade, India is seeking duty concessions for labour-intensive sectors like textiles, gems and jewellery, leather goods, garments, plastics, chemicals, shrimp, oil seeds, chemicals, grapes, and bananas in the proposed pact with America.
On the other hand, the US wants duty concessions in sectors like certain industrial goods, automobiles (electric vehicles in particular), wines, petrochemical products, dairy, and agriculture items such as apples, tree nuts and GM (genetically modified) crops.
While the import of GM crops from the US continues to remain a non-starter due to regulatory norms in India, New Delhi is open to import non-GM products like Alpha alpha hay (a kind of cattle feed).
The US has on multiple occasions raised concerns over certain non-tariff barriers being faced by American goods in the Indian markets.
Whether another round of talks will happen on the proposed pact between the two countries, the official said,“We are trying to finalise things as early as possible.
The US remained India's largest trading partner for the fourth consecutive year in 2024-25, with bilateral trade valued at USD 131.84 billion. The US accounts for about 18 per cent of India's total goods exports, 6.22 per cent in imports, and 10.73 per cent in the country's total merchandise trade.
With America, India had a trade surplus (the difference between imports and exports) of USD 41.18 billion in goods in 2024-25. It was USD 35.32 billion in 2023-24, USD 27.7 billion in 2022-23, USD 32.85 billion in 2021-22 and USD 22.73 billion in 2020-21. The US has raised concerns over this widening trade deficit.
India, EU Looking For Early Harvest Trade Agreement By July: Official
Negotiations for a proposed trade pact between India and the 27-nation European Union are progressing at a faster pace and both the sides are looking at concluding the talks for an early harvest trade agreement by July this year, a government official said on Wednesday.
The early harvest or an interim trade agreement would include issues such as intellectual property rights (IPRs), government procurement, tariff, and non-tariff barriers, the official said.
An Indian official team from the commerce ministry is visiting Brussels this week for the next round of negotiations on the trade agreement with the European Union (EU). This visit comes in the backdrop of recently-concluded eleventh round of talks between chief negotiators of both the sides on May 16 here in the national capital.
“We are looking for an early harvest. We are trying to do it as early as possible...targeting by July for early harvest,” the official added.
The two sides have agreed to conclude the agreement in two phases on account of the uncertain global trade environment, particularly due to the US tariff actions under President Donald Trump.
India has followed the practice of negotiating trade pacts in two phases with Australia.
The early harvest pact would lead to a full fledged free trade agreement.
Besides demanding significant duty cuts in automobiles and medical devices, the EU wants tax reduction in products like wines, spirits, meat, poultry and a strong intellectual property regime.
Indian goods' exports to the EU, such as ready-made garments, pharmaceuticals, steel, petroleum products, and electrical machinery, can become more competitive if the pact gets concluded successfully.
In June 2022, India and the 27-nation EU bloc resumed negotiations for a comprehensive free trade agreement, an investment protection agreement and a pact on geographical indications (GIs) after a gap of over eight years.
It stalled in 2013 due to differences over the level of opening up of the markets.
On February 28, Prime Minister Narendra Modi and the European Commission President agreed to seal a much-awaited free trade deal by the end of this year.
The India-EU trade pact negotiations cover 23 policy areas or chapters, including Trade in Goods, Trade in Services, Investment, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Trade Remedies, Rules of Origin, Customs and Trade Facilitation, Competition, Trade Defence, Government Procurement, Dispute Settlement, Intellectual Property Rights, Geographical Indications, and Sustainable Development.
India's bilateral trade in goods with the EU was USD 137.41 billion in 2023-24 (exports worth USD 75.92 billion and imports worth USD 61.48 billion), making it the largest trading partner for goods.
The EU market accounts for about 17 per cent of India's total exports, while EU's exports to India make up 9 per cent of its total overseas shipments.
In addition, the bilateral trade in services, in 2023, between India and the EU was estimated at USD 51.45 billion.
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