US Advocates Comprehensive Trade Agreement with India
US Secretary of Commerce Howard Lutnick advocates for a comprehensive free-trade agreement with India, urging a reduction in tariffs across the board rather than a product-specific approach. This initiative aims to deepen bilateral trade ties, especially amidst upcoming reciprocal tariffs. Emphasizing a justified tariff strategy, Lutnick discusses the implications of high tariff rates on India and the necessity for thorough negotiations.
On Friday, United States Secretary of Commerce Howard Lutnick emphasized the Trump administration’s focus on a significant free-trade agreement (FTA) with India. Instead of negotiating individual product deals, Lutnick proposed a more comprehensive approach aimed at reducing tariffs across the board, facilitating a stronger relationship between the nations.
Highlighting the importance of broad negotiations, Lutnick stated, “It’s time to do something big, something grand, something that connects India and the US together, but does it on a broad scale.” His comments followed discussions with India’s Commerce and Industry Minister Piyush Goyal, emphasizing the urgency to address upcoming US reciprocal tariffs set to take effect on April 2.
India seeks to mitigate these reciprocal tariffs while progressing towards a bilateral trade agreement (BTA) by October. However, President Trump has indicated that concessions may not be forthcoming as Lutnick noted, “How you treat us is how we would like to treat you … India has some of the highest tariffs in the world.”
Lutnick acknowledged Prime Minister Modi’s positive rapport with President Trump, suggesting that a deal is possible. He articulated that India’s high tariffs protect its economy but must be reconsidered to foster a balanced trade relationship with the US.
Despite challenges, including India’s reluctance to open its agriculture sector, Lutnick expressed optimism for market access, advocating for a comprehensive negotiation approach. He asserted, “The right way to do trade… is to put everything on the table.”
The Secretary dismissed concerns that tariffs contribute to inflation, pointing out that India’s high tariff rates do not necessarily correlate with price increases. A report from Nomura notes a stark comparison in tariff rates, with India’s average effective tariff on US imports standing at 9.5 percent versus the US’s 3 percent tariff on imports from India.
In summary, Secretary Howard Lutnick’s push for a broad-based free-trade agreement with India underscores a shift towards comprehensive tariff reductions rather than incremental product-specific negotiations. Amidst upcoming reciprocal tariffs and a complex trade landscape, both nations are encouraged to engage constructively. The dialogue highlights the necessity for India to reassess its tariff strategies to foster a mutually beneficial economic relationship with the United States.
Original Source: www.business-standard.com
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