India-US Trade Pact Nears Completion
India is likely to discuss Washington's Section 301 investigation and potential tariff measures with US trade officials, as the two nations seek to finalize a deal, an Indian government source said on Monday.
U.S. trade team, headed by chief U.S. negotiator Brendan Lynch, will meet Indian trade negotiators in New Delhi from Tuesday for three days.
Commerce and industry minister Piyush Goyal on the sidelines of the summit on Monday confirmed that the first phase of the bilateral trade agreement had been completed and the discussions were now underway on a few minor points or “commas and full stops”.
The two countries agreed in February on an initial agreement on a trade deal but talks stalled after President Donald Trump's tariff package was overturned by the US Supreme Court.
India may meet with US trade officials on Monday to discuss Washington's probe into its Section 301 investigation and possible tariff measures on the eve of the two nations' plans to conclude a trade pact, an Indian government source said on Monday.
The talks in New Delhi will start Tuesday with a US delegation led by chief negotiator Brendan Lynch and trade officials in India.
India and the US have completed most aspects of the first phase of the trade deal, and now a few "commas and full stops" are being discussed, Commerce and industry minister Piyush Goyal said in an interview with Indian media outlet ET.
Key Highlights:
- India and the US are nearing a trade deal, with only minor issues left to resolve
- India will seek tariff relief and discuss the impact of US Section 301 investigations
- New Delhi wants competitive tariff rates to boost its edge over regional rivals in the US market
In February, the two nations reached an initial understanding for a trade deal but negotiations slowed down after US President Donald Trump's sweeping tariff measures were struck down by the US Supreme Court.
Since the court order, the Trump administration has initiated investigations under Section 301 of the Trade Act of 1974 to probe unfair practices by a number of trading partners including India, and has imposed a blanket 10 per cent tariff.
During the talks with Lynch and his team, New Delhi will be seeking relief from the tariffs that are being imposed in the probe, an Indian trade source, who spoke on condition of anonymity as details of the talks are confidential, told reporters.
"India has to discuss tariff rate, 301 probe impact, and aim for competitive tariff rate versus direct competition," said the source, adding the deal could be agreed if "we get the terms fair, equitable, and balanced."
India also wants tariff treatment which it believes will benefit it and make it more competitive with competing manufacturing centers in Asia, the source said.
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The US Trade Representative (USTR) also initiated two unilateral Section 301 investigations in March on excess capacity and the lack of action to eliminate forced labor in global supply chains by several countries, including India.
In the two investigations, India has vehemently denied the allegations made by the US Trade Representative and has asked for the probes to be launched as the initiation notice does not offer a cogent reason to substantiate the allegations.
Also Read: India–US Trade Deal: Big Gains for India?
India had a chance to get better rates as compared to other developing nations like South Asian and Southeast Asian countries such as Bangladesh, Pakistan and Sri Lanka, the official said.
The source reported that negotiations had progressed with USTR (U.S. Trade Representative) Jamieson Greer to visit India when the "broad outlines" are finalized, as it were.
The discussions are coming at a time when India is looking forward to expanding its presence in the US market amidst a tussle over trade tensions, tariffs, and other policy hurdles.
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India has offered to lower or remove tariffs on all U.S. industrial goods, a broad range of U.S. food and agricultural products, including dried distillers' grains (DDGs); red sorghum for animal feed; tree nuts; fresh and processed fruit; soybean oil; wine and spirits; and others.
Additionally, New Delhi has declared its intention to buy $500 billion of energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal from the USA within the next five years.