India-US Trade Talks Moving Forward, Final Deal Expected Soon

New Delhi: India and the United States are moving ahead with their trade discussions in Washington. The Indian delegation, led by Rajesh Agrawal, is in the US capital for the negotiations. Agrawal is a senior official in India’s commerce department. Recently, another member from the Centre for Trade and Investment Law (CTIL) joined the Indian team to support the discussions.

Sources close to the talks say that things are going smoothly. Both countries are trying to finalise an interim trade agreement before July 9, although there are a few tricky areas, especially agriculture and dairy.

Tariff Pressure Building as Deadline Nears

A key reason for the July 9 deadline is the 26% extra tariff the US had announced on Indian goods back on April 2. The US had paused that tariff for 90 days, but if no agreement is reached by July 9, the high tariffs will come back into effect.

This extra tariff is on top of an existing 10% US import duty. India wants complete removal of this 26% extra tariff to protect its exports.

Tough Talks Around Agriculture and Dairy

The most difficult part of the talks is the US demand for access to India’s agriculture and dairy markets. India is cautious in these areas because they directly impact millions of farmers and small producers. So far, India has never opened up its dairy market in any trade deal.

The US also wants India to lower duties on items like electric cars, wines, petrochemicals, apples, and genetically modified crops.

India Wants Better Access for Its Exports

In return, India is pushing for lower US duties on Indian goods like textiles, gems, jewellery, leather items, garments, shrimp, bananas, grapes, and plastics. These are sectors that create lots of jobs in India.

Both countries agree that more trade can help both economies. They want to increase their trade from the current USD 191 billion to USD 500 billion by 2030.

Deal Likely in Two Stages

Officials say that the current talks are for an interim pact, which would be the first step. A bigger and full bilateral trade agreement (BTA) is expected to be signed by fall this year, around September or October.

The US negotiation team had visited India from June 5 to 11, and both sides plan to continue talks virtually and in person in the coming weeks.

Trade Numbers Growing

India’s exports to the US grew by 21.78% to USD 17.25 billion in April-May this financial year. Imports from the US also went up by 25.8% to USD 8.87 billion, showing strong trade interest on both sides.

(With PTI Inputs)