NEW DELHI: Even as India is racing against time to clinch a trade deal with the US before expiry of the July 9 deadline, when the 90-day exemption period for implementation of reciprocal tariff gets over, sources say that the first phase of the deal would only address the low-hanging fruits. “The trade talks will be in multiple phases, but the first phase should end before July 9,” said an anonymous government source.
With US president Donald Trump announcing a deal with China on Wednesday, India would be in a hurry to conclude the first phase before July 9. The US has also finalized a trade deal with the UK.
India was the first country to start negotiating a trade deal with the US. In an interview with French newspaper Le Figaro on Tuesday, Foreign Minister S Jaishankar had said he is hopeful of reaching an agreement with US before the reciprocal tariffs kick in.
A US delegation which visited India had a four-day meeting with Indian negotiators. The meeting ended on Tuesday. The talks veered from tariff rates, better market access, digital trade, and tariff on agriculture and allied goods. The two teams reportedly discussed the issue of a 50% tariff on steel and aluminium. India has threatened retaliatory action against the US over doubling tariffs on steel and aluminium.
India has so far resisted giving easier access to agriculture and dairy imports. But the government hinted it might relent on the issue with the US.
A Niti Aayog report recently argued that the US is expected to remain a big market for export of surplus food from India, and all efforts need to be made to keep a favorable environment for exports to the US. The report, while arguing for protecting sensitive products like dairy and poultry, makes a case for lowering tariffs on imports of commodities in which India enjoys supply advantage.
The two countries have also discussed non-tariff barriers with the US raising concerns over India’s quality control measures and local procurement conditions for manufacturing. The US has raked up India’s famr subsidy too.
A top commerce ministry official told this newspaper that the negotiations are on and it is not fair to divulge details.
Highlights
US, China finalized a trade deal Wednesday, with China agreeing to cut export restrictions on rare earth minerals India wants to seal a deal with US before reciprocal tariffs kick in.