India and the US are working on the early tranche of the proposed bilateral trade agreement (BTA) and want to conclude it before July 9, when the 90-day pause on reciprocal tariffs is set to end, Commerce Secretary Sunil Barthwal has said.
However, New Delhi is not sure of how the US will take on commitments for lowering their MFN tariffs (regular tariffs imposed on all trading partners) as part of the BTA in the absence of Congress’ Trade Promotion Authority (TPA), a source tracking the matter said.
“We are working on the early tranche and as you are aware that there is a date (July 9), before that we would like to conclude this early tranche,” Barthwal said at a press briefing on Monday.
Negotiations on
The Commerce Secretary pointed out that the Indian negotiating team visited the US twice and the US team also came to India twice for the negotiations. “There is good progress and we are hopeful that this will be done within the timelines,” he added.
The prime objective of the ongoing talks between India and the US, which are now continuing virtually with one physical meeting possible later this month, seems to be to ward off the reciprocal tariffs by the US.
On April 2, US President Donald Trump had announced reciprocal tariffs on most trade partners with which the US had a trade deficit, which included a 26 per cent levy on India. While much of the tariff was put on hold for 90 days, a 10 per cent baseline tariff was imposed on all countries, including India, in April. “India is now focussed on getting the entire 26 per cent, including the 10 per cent baseline tariff, rolled back. It also wants the 50 per cent sector specific tariff on steel and aluminium and 25 per cent on auto, that have already been imposed, to be withdrawn,” the source said.
But it is not yet clear to what extent the US will be willing to make additional market offers to India. “The US needs the Congress’s TPA to lower its tariffs below the MFN levels. That is something that they need to work out within their system,” the source said.
New Delhi may negotiate with the US for lowering of MFN tariffs after the early tranche has been concluded. The US has made steep demands in the area of market access for both industrial and agricultural goods which India is weighing.