As Trump’s Tariff Clock Ticks, India and US Rush to Seal $500 Billion Trade Pact
India and the US are rushing to finalize an interim trade pact before Trump’s tariff reprieve expires, aiming for $500 billion in bilateral trade by 2030. Key areas under discussion include market access and digital trade, although significant hurdles like tariffs on steel and agricultural imports remain. The G7 Summit may provide an opportunity for a symbolic signing of the initial agreement.
As the deadline for Donald Trump’s tariff reprieve looms, India and the United States are urgently negotiating an interim trade agreement. This pact aims to set the foundation for a broader goal of reaching $500 billion in bilateral trade by 2030. After four intensive days of discussions in New Delhi, officials from both countries returned with optimism, calling the talks potentially the most fruitful they have had so far.
Leading negotiations on the Indian side was Rajesh Agrawal from the commerce ministry, who worked closely with representatives from the Office of the US Trade Representative. The talks centered around improving market access for significant agricultural and industrial goods, lowering tariffs, and addressing non-tariff barriers that complicate trade.
A senior government official noted, “The negotiations held with the US side were productive and helped in making progress towards crafting a mutually beneficial and balanced agreement including through achievement of early wins,” as reported by Reuters. Meanwhile, another important area of focus was digital trade, where both nations discussed plans to enhance customs processes and trade facilitation. Insiders suggest that these initiatives could usher in significant advancements in the agreement.
However, challenges still exist despite the strides made in negotiations. India has resisted US requests for greater access to its wheat, dairy, and corn markets. Instead, they proposed tariff reductions on select valued American goods such as almonds, pistachios, and walnuts. Moreover, India is pushing for a rollback of a 10% baseline tariff imposed during the Trump administration, which the US rejects, citing similar tariffs apply to allied nations like the UK.
Steel tariffs have also become a point of contention. India is seeking relief from the 50% tariffs on its steel exports but has shown willingness to increase purchases of US energy resources, including liquefied natural gas and crude oil. Additionally, there is an interest in enhancing defense imports from the US.
With the G7 Summit approaching, where Trump and Indian Prime Minister Narendra Modi are scheduled to meet, both countries are aiming to sign a symbolic agreement during this pivotal event. June has been earmarked as a targeted month to finalize even the initial phases of the deal. Trump’s administration is under pressure for its swift trade changes, hoping to display some progress before the conclusion of a 90-day suspension of reciprocal tariffs, which, if unresolved, might impose a severe 26% duty on Indian exports like textiles and seafood.
At the same time, as Indian delegates focused their efforts in New Delhi, Commerce Minister Piyush Goyal was busy in Switzerland negotiating a separate major trade deal with the European Union, India’s second-largest trading partner. Goyal indicated that India is prepared to prioritize simpler issues as a way to move forward while postponing more complex areas for later discussions. Officials hint that an interim agreement is indeed within reach, with more developments expected by September or October.
In summary, India and the United States are racing against time to establish an interim trade agreement. The goal is ambitious, aiming for $500 billion in bilateral trade by 2030. While vital discussions yielded noteworthy progress, significant hurdles linger, particularly regarding tariffs on steel and key agricultural products. As both sides prepare for a potential signing at the G7 Summit, the urgency of the situation is particularly palpable.
Original Source: www.timesnownews.com
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