Commerce Minister Piyush Goyal has now held two meetings in a row with his American counterpart, US Commerce Secretary Howard Lutnick, as the two countries head for an early harvest deal by July.
Indian negotiators are aiming for a complete exemption from the 26% reciprocal tariffs imposed by the US, as an interim trade deal is expected to be signed before the tariff pause period expires.
Talks for a mini trade deal are underway and aimed for conclusion before July 9 to avoid reciprocal tariffs, according to top government sources aware of the matter. While the US cannot bring tariffs lower than the most-favoured-nation rate without approval from the US Congress, an exemption is still possible.
A three-part deal between the countries looks imminent now. An interim trade deal, to be signed before July, will include tariff reductions and certain non-tariff barriers. A second tranche, will be completed by the fall deadline of September-October, that was highlighted by Prime Minister Narendra Modi and a timeline for the third tranche is not yet finalised.
Held a constructive meeting with Secretary @HowardLutnick for a mutually beneficial trade agreement. Committed to enhancing opportunities for our businesses and people. 🇮🇳 🇺🇸 pic.twitter.com/WiADbGNkif
India is batting for a minimum import price or import quotas in sensitive sectors like dairy and agriculture as part of the deal. A reduction or removal of the 5–7% basic customs duty for its exports of labour-intensive products, like leather, is also among the demands put forth.
India is offering market access to the US agri sector, provided that it only sends nongenetically-modified crops. Regulatory norms in India will not allow the import of GM produce like alfalfa hay. The US is also seeking concessions in certain industrial goods, automobiles, wines, petrochemical products, dairy and other agricultural products, which are currently under discussion.
The US is also looking for liberalisation of certain norms from India, including those on quality control orders and the existing licensing system on IT hardware such as laptops and servers.
The negotiations are a part of the countries' efforts to expand bilateral trade to $500 billion by 2030, as envisioned in the BTA. The terms of reference for the BTA have been finalised, which include around 19 chapters covering issues like tariffs, goods, services, rules of origin, non-tariff barriers and customs facilitation.
Good discussions with Secretary @HowardLutnick towards expediting the first tranche of India-US Bilateral Trade Agreement. pic.twitter.com/8JjklXyEjl
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