Protecting Indian interests will remain supreme in the on-going bilateral trade agreement (BTA) negotiations with the US, a top source has said.
Both India and the US are continuing to negotiate to get an interim trade deal in place before July 9, when the 90-day pause period on the US reciprocal tariff ends, but the talks were tough, another source added.
“India’s interests will remain supreme and will be protected,” the first source said while referring to the sensitivity around the talks and New Delhi’s continued insistence that there was no US mediation to end the recent India-Pakistan conflict.
On the July 9 deadline to arrive at an interim deal to avoid the reciprocal tariffs announced on the country by the US, the second source said that talks were on, and both sides were hopeful that a pact could be forged within the time.
“Our talks are continuing in the virtual format. A team of officials from India will travel to Washington DC for the next round of BTA talks, but a date has not been fixed yet,” the official said.
Trump tariff
On April 2, Trump had announced reciprocal tariffs on most trade partners with which the US had a trade deficit. India was slapped with a 26 per cent tariff while many competing countries including Vietnam, Bangladesh and Indonesia attracted higher rates.
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 wants 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per cent sector specific tariff on steel and aluminium and 25 per cent on auto, that have already been imposed, to be withdrawn.
US’ demand
The US, however, is being a tough negotiator and is seeking steep cuts in tariffs on a whole range of products. It is also continuing to demand concessions in sensitive agriculture items, including GM crops, despite India’s insistence that politically it would be difficult to make the offers.
“The negotiations are indeed tough. But one hopes that at least some understanding on a part of the deal can be reached before July 9,” the source added.
But there are indications that the US may not offer any reduction in its MFN tariffs (regular import tariffs imposed on all countries) as it does not have a Congressional authority to do so.
“The MFN cuts may be made by the US in the full first tranche of the India-US BTA which is expected in Fall 2025 (September-October). A lot of negotiations are yet to happen,” the source said.