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India and the US are progressing with the trade discussions in Washington, even as the US administration is cracking down on enrolment of international students. The India-US interim trade deal is likely to be announced within a week. Sources said that both the countries have agreed upon all terms included in the deal. The Indian team, led by Special Secretary in the Department of Commerce, Rajesh Agarwal, is in Washington to negotiate with the US officials.
It is worth noting that the deal comes just in the nick of time, as US President Donald Trump’s deadline for imposing reciprocal tariffs on foreign nations across the world ends on July 9. If the trade deal is not finalized before the July 9 deadline, the 26% extra tariff announced by the US on Indian goods, on April 2, would come into effect. The US had paused the implementation of the high tariff for 90 days, which India is trying to use for its advantage.
US Has No Plans To Extend Pause
Meanwhile Trump, in an interview with Fox News, said he does not plan to extend the pause. “I don’t think I’ll need to,” he said.
He said he could extend the pause and that it was not a big deal but affirmed that letters notifying countries about the upcoming tariffs would be sent to them very soon. We will see how the countries treat us, Trump told Fox News.
The extra tariff is on the top of an existing 10% US import duty which is already being implemented. India wants a complete waiver of the 26% extra tariff on its exports.
Different Demands
Both the sides are working towards a multi-sectoral, comprehensive first tranche of a Bilateral Trade Agreement (BTA) by October this year. The talks would be finalized even when there are a few contentious areas like the agriculture and dairy, sources added. The US is demanding access to India’s agriculture and dairy markets but India is being cautious as such an access would have a direct impact on millions of farmers and small producers. Till now, India has never opened up its dairy market in any trade deal.
The US also wants India to reduce duties on electric cars, wines, petrochemicals, apples and genetically modified crops. In return, 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. These areas would generate employment for thousands of youths.
Both countries are trying to work out for more trade that can aid their economies grow. They want to increase their trade from the current USD 191 billion to USD 500 billion by 2030.
Officials said that the current talks are aimed at reaching an interim pact. A bigger and full bilateral trade agreement is expected to be signed by September or October. The US negotiation team had visited India from June 5-11.
