The interim trade agreement between India and the US will be signed once the new global tariff architecture of America is in place, Commerce secretary Rajesh Agrawal said on Monday.
"International Emergency Economic Powers Act (IEEPA) tariffs don't exist per se due to US Supreme Court rulings now. Under Article 122, tariffs of 10 per cent exist globally now. Any deal that India signs will be signed against a tariff structure, said Agrawal.
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 US is working to recreate a global tariff architecture. "Once US creates that, it will be better to sign then. Actual signing will be done when new architecture of tariffs globally is done by US." he added.
The pact, the official said, has already been finalised and decided upon, and both teams are negotiating to iron out the finer details. "Since India did not sign a deal with the US yet, we'll wait for tariff clarity first," the official added.
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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