(HT)
India and the US want to conclude bilateral trade talks for an interim deal by the third week of June that could not only revoke the 10% baseline tax already imposed by the Trump administration from April 5, but also annul the proposed 16% additional reciprocal tariffs on Indian goods that will come into effect from July 9, people familiar with the matter said.
An early harvest deal—mostly related to reduction of tariffs on goods and elimination on non-tariff barriers—is expected to be finalised after the two negotiating teams meet in New Delhi next month, they added requesting anonymity.
Commerce minister Piyush Goyal was in Washington last week and met counterpart Howard Lutnick twice in the context of the deal, which some of the people cited above said could be closed before June 25. Rajesh Agrawal, India’s chief negotiator was also in the US last week to discuss the deal. On Tuesday, foreign secretary Vikram Misri met US Under Secretary Jeffrey Kessler in Washington and the Indian embassy in Washington said that among other issues, the two “discussed early convening of the India-US Strategic Trade Dialogue to deepen tech & trade collaboration.”
This interim deal will address concerns of the Trump administration regarding India imposing high tariffs on American goods. In return, New Delhi will get preferential access for labour-intensive products and also full exemption from the 26% reciprocal tariff on domestic goods (10% baseline tariff already in force and 16% additional levy proposed to be imposed on Indian goods from July 9 if the deal fails). The country-specific reciprocal tariffs were announced by Washington on April 2.
After last week’s bilateral deliberation with a visiting Indian negotiating team, the focus now shifts to New Delhi where an American negotiating team is expected to meet Indian negotiators next month, the people cited above added.
The people said that it is very likely that the meetings next month will be the final round of negotiations before the announcement of an initial deal. By September-October, a relatively larger tranche of a proposed bilateral trade agreement (BTA) will be negotiated, they added. And eventually, a full, comprehensive and long-term BTA will be signed to double bilateral trade to $500 billion by 2030, they said.
HT on May 22 reported that 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.
According to people mentioned above, the interim deal with the US may be finalised after Goyal returns from Europe. He is expected to visit Italy and France in the first week of June, followed by his visits to Switzerland in the second week of June.
