(HT)
India and the United States aim to announce an early harvest deal next month with both sides allowing greater market access to each other by removing both tariff and non-tariff barriers for a majority of goods, including farm produce, while protecting sensitive items through a negative list or quota restrictions, officials aware of the development said.
The early deal involving low-hanging fruits such as automobiles and agricultural items would exhibit New Delhi’s earnestness to substantially reduce tariffs on American products. Similarly, Washington would reciprocate by removing the 10% reciprocal baseline tariff for Indian goods and by withdrawing a proposed India-specific 16% additional tariff from July 9, they said requesting anonymity.
The early harvest deal, which is an early-stage agreement, will be followed by the first tranche of a comprehensive Bilateral Trade Agreement (BTA) by September-October 2025 as proposed by the two leaders – Prime Minister Narendra Modi and President Donald Trump on February 13 in Washington.
While some US agricultural items and farm produce, such as maize, almonds, soyabean, pistachio, poultry, and meat could be allowed in India, there would be restrictions on genetically modified (GM) foods that are not permitted, they said.
In return, the US will give greater market access to India’s labour-intensive merchandise like textiles, gems and jewellery, besides withdrawing reciprocal tariff measures imposed on April 2. According to officials, commerce minister Piyush Goyal’s US visit brightens prospects of finalising an initial trade deal soon.
HT on Tuesday reported that Washington and New Delhi may announce an initial trade deal next month and India may escape the US’ additional reciprocal tariff that was set to kick in on July 9. After several rounds of discussions, India and the US have arrived at near consensus on granting duty-free access to over 90% products from the respective countries for mutual gain, provided Washington accords preferential treatment to Indian merchandise by removing all non-tariff barriers, the report said.
Minister Goyal in a post on X also hinted positive progress of talks on Tuesday. “Good discussions with Secretary @HowardLutnick towards expediting the first tranche of India-US Bilateral Trade Agreement,” he said in the post. Lutnick is the US commerce secretary. Officials on Wednesday also confirmed Goyal’s meeting with United States Trade Representative (USTR) Jamieson Greer.
Goyal is currently in the US for a week-long visit at a time chief negotiators of both sides are intensely engaged in trade negotiations in Washington. The minister also visited Washington in March to oversee the trade talks. While the US negotiating team is led by assistant US trade representative Brendan Lynch, the Indian team is led by commerce secretary-designate Rajesh Agrawal. The chief negotiators of the two countries are expected to conclude the current round of talks on Thursday.
Both sides are working to arrive at an interim deal to avoid triggering another 16% country-specific reciprocal tariffs from July 9, which is over and above the 10% baseline tariff imposed on almost all US trading partners for having high tariffs on American exports, the people mentioned above said.
