Trade Agreement In Washington Flourishes Amidst July 1 Pact Deadline Haste, Indian Official Joins Delegation

New Delhi: Negotiations for an interim trade agreement in Washington are progressing well, with an additional Indian official joining the delegation, sources said.

An Indian team, headed by chief negotiator Rajesh Agrawal, is already in Washington for the talks.

An official from the Centre for Trade and Investment Law (CTIL) has also joined the Indian team, sources said, adding that the talks are progressing well between the two sides.

These deliberations are important as both the countries are engaged in negotiations for an interim trade deal and are trying to finalise the pact before July 9, though there are challenges in areas like agriculture and dairy, one of the sources said.

Agrawal is the special secretary in the department of commerce.

The high tariffs, announced by the US on April 2, were suspended by the Donald Trump administration till July 9.

On April 2, the US imposed an additional 26 per cent reciprocal tariff on Indian goods but suspended it for 90 days. However, the 10 per cent baseline tariff imposed by America remains in place. India is seeking full exemption from the additional 26 per cent tariff.

Agriculture and dairy sectors are difficult and challenging areas for India to give duty concessions to the US. India has not opened up dairy in any of its free trade pacts signed so far.

The US wants duty concessions on certain industrial goods, automobiles - especially electric vehicles, wines, petrochemical products, dairy, and agricultural items like apples, tree nuts, and genetically modified crops.

India is seeking duty concessions for labour-intensive sectors like textiles, gems and jewellery, leather goods, garments, plastics, chemicals, shrimp, oil seeds, grapes, and bananas in the proposed trade pact.

When asked about the impact if July 9 deadline is not extended, a source said that the tariffs would come to the April 2 level (26 per cent in case of India).

The two countries are looking to conclude talks for the first tranche of the proposed bilateral trade agreement (BTA) by fall (September-October) this year.

The pact is aimed at more than doubling bilateral trade to USD 500 billion by 2030 from the current USD 191 billion.

Before the first tranche, they are trying for an interim trade pact.

The US team was here from June 5 to June 11 for the talks. The negotiations will continue both virtually and physically in the days to come.

India's merchandise exports to the US rose by 21.78 per cent to USD 17.25 billion in April-May this fiscal, while imports rose by 25.8 per cent to USD 8.87 billion.

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