India and the US are discussing a preliminary trade deal before finalizing a full bilateral trade agreement. The preliminary agreement excludes sensitive issues like immigration and intellectual property rights while proposing tariff concessions on select products. Indian negotiators seek structured duty reductions based on existing trade frameworks. The negotiations are significant given the current trade surplus India maintains with the US.

India and the United States are negotiating a bilateral trade agreement (BTA) and are considering a preliminary trade deal prior to finalizing the comprehensive agreement. This initial agreement aims to exclude sensitive topics such as immigration policies and intellectual property rights, focusing instead on tariff concessions for specific products like lentils, almonds, and advanced pharmaceuticals.

Indian negotiators are advocating for a structured approach to duty reductions, similar to frameworks established in recent trade agreements with the UAE, Australia, and the European Free Trade Association (EFTA). This method facilitates a balance between domestic industry interests and market access commitments, streamlining the negotiation process based on proven templates.

Discussions have been reported about signing a preliminary agreement before reaching a complete BTA, which was referenced in a joint statement following Prime Minister Narendra Modi’s meeting with President Donald Trump. The initiative aims for a multi-sector BTA by fall 2025, with a preliminary agreement expected to be finalized before that date.

While queries sent to relevant trade ministries have remained unanswered, insights from the Global Trade Research Initiative (GTRI) caution against pursuing a full-fledged free trade agreement (FTA) with the US. The founder expressed concerns about US demands, including the opening of government procurement channels to American firms and modifications to patent protections.

Furthermore, the upcoming announcement of the US’s 25% tariffs on Indian steel and aluminum is notable. In a reciprocal move, India has proactively reduced tariffs on American imports such as bourbon whiskey, Harley-Davidson motorcycles, and ethernet switches in an effort to address trade imbalances.

Trade statistics indicate a substantial surplus for India, with exports to the US reaching $77.52 billion in FY24 compared to $42.19 billion in imports. India aims to safeguard this surplus and prevent US tariff increases on vital export categories like garments, electronics, engineering goods, and pharmaceuticals, which have seen significant growth recently.

In summary, India and the US are strategically negotiating a preliminary trade agreement, excluding sensitive issues, while highlighting tariff concessions for key products. The structured approach aims to balance domestic interests with market commitments. Despite significant trade surpluses, India remains cautious about extensive trade concessions that could compromise its industry. These developments are crucial as the two nations pursue a more robust trade relationship.

Original Source: www.livemint.com

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