Source: The Economic Times
The Washington, India and the United States completed their fifth round of talks for a proposed bilateral trade agreement (BTA) in Washington, D.C. from July 14 to 17. The goal was to achieve an interim trade deal before August 1, the date for when suspended U.S. tariffs will be put back in place.
The Indian delegation was headed by Rajesh Agrawal, Special Secretary in the Department of Commerce. An Indian official confirmed that the team is coming home after wrapping up their talks.
These discussions are significant because the U.S. levied high tariffs (26 percent) on several countries including India and then took a pause for 90 days. This pause was extended to August 1. Both sides were trying to agree on important issues in advance of this deadline.
The Major Topics Covered
The discussions addressed several areas:
- Agriculture/dairy products
- Automotive/electric vehicles
- Industrial goods (including chemicals)
- Steel and aluminium tariffs.
- SCOMET (Special Chemicals, Organisms, Materials, Equipment and Technologies)
- Trade with non-market economies
India has unequivocally stated there won’t be tariff concessions on dairy products, an area it’s sensitive to. The farmers in India also alerted the Government of India to exclude agriculture from the agreement.
What India Wants
India is asking the U.S. to:
- Remove the extra 26% tariff
- Lower tariffs on steel (50%) and automobiles (25%)
Provide improved access for Indian exports including textiles, garments, gems and jewellery, leather goods, plastics, chemicals; shrimp; oil seeds; grapes; and bananas
India has indicated it may consider retaliatory measures under WTO provisions if tariffs are reimposed without resolution.
What the US Wants
The United States is looking for:
Duty concussion on industrial goods and electric vehicles, More access for wines, petrochemicals, dairy items, apples, tree nuts, and genetically modified (GM) crops
Trade Between the Two Countries
Trade between India and the U.S. has grown in recent months:
- India’s exports to the U.S. rose by 22.8% to $25.51 billion in April–June
- India’s imports from the U.S. increased by 11.68% to $12.86 billion
Next Steps
Both countries are aiming to secure a provisional trade deal before August 1 in order to avoid the re-imposition of U.S. tariffs. The two countries are expected to have a complete trade deal by September or October. This deal is viewed as pivotal to enhancing the bilateral economic relationship.
