The interim trade agreement between India and the US will be signed once the new global tariff architecture of America is in place, PTI reported quoting official sources.
"Because at the end of it, each country is doing a deal as a part of a package where one is at comparative advantage...vis a vis competitors," the official told PTI.
This comes days after commerce ministry dispelled reports stating that discussions on bilateral trade agreement between India and United States are on hold, and said both sides engaged in discussions for a mutually beneficial bilateral trade agreement.
The official told PTI that the US is working to recreate a global tariff architecture. "Once they are on that pathway, they are able to create that. I think at that juncture, it would be right to sign the deal," the official said.
The pact, the official said, has already been finalised and decided upon, and both teams are negotiating to iron out the finer details. "But actual signing, to my mind, will be done when the new architecture of tariff globally will be in place," the official added.
In case of any change in the 18% tariffs on India, the official said, these are all subject to how it happens and how the global architecture pans out.
"So whenever we are ready, the US side is ready with that architecture, I think that will be the opportune time to sign it," the official said, adding, "There is nothing that there is a standoff. There is nothing that the deal is not there."
The trade deal is about comparative and preferential market access to each other. The 18% tariff on India was the lowest among its competitors, including China, Vietnam and Thailand.
India and the US last month announced finalisation of a framework for the first phase of the bilateral trade agreement. According to that framework, the US had agreed to reduce tariffs on India to 18%.
However, the tariff architecture in the US has changed following its Supreme Court ruling against President Donald Trump's sweeping tariffs. After that, the US President imposed 10% tariffs on all countries for 150 days from Feb. 24.
In view of these changes, the meeting of the chief negotiators of India and the US has been postponed. They were scheduled to meet last month to finalise the legal text of the pact, which was expected to be signed this month.
Stung by the SC's ruling that invalidated most of the reciprocal tariffs, the Trump administration on Thursday initiated a formal probe into India and 15 other major trade partners for alleged unfair practices.
The United States Trade Representative has initiated investigations under Section 301 of the Trade Act of 1974 regarding the acts, policies, and practices of certain economies relating to structural excess capacity and production in certain manufacturing sectors, according to a notification.
(With Inputs from PTI)
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