India-US trying to finalize trade deal before July 9, sword of tariff still hanging
Trade: India and the US are trying to finalize an interim trade agreement before July 9. Both countries are engaged in talks before the exemption from the 26 percent additional tariff imposed by the US ends. Sectors like agriculture and dairy are challenging in the trade deal.
Negotiations are going on between India and the US for an interim trade agreement, and both countries are trying to finalize this agreement before July 9. This information was given on Monday, quoting sources.
On April 2, the US had indicated 26% additional tax (tariff) on products originating from India; however, the Trump administration withheld it for 90 days. However, the 10% basic tax continues. India seeks full exemption from the 26% additional tax.
When asked if India and the US want to finalise the interim trade deal by July 9, sources said, "We are very keen. We are negotiating and trying. Both sides are trying, but the agreement will be done only when both sides are satisfied." He further said, there are some areas in every trade agreement that have problems. A source said, "For India, the agriculture and dairy sectors are the most challenging. India has not opened the dairy sector in any of its free trade agreements (FTAs) so far."
The US wants India to exempt duties on certain industrial goods, automobiles (especially electric vehicles), alcohol, petrochemical products, dairy, and agricultural products such as apples, dry fruits, and biologically modified crops. At the same time, India wants duty concessions for labour-intensive sectors such as textiles, jewellery, leather products, apparel, plastics, chemicals, shrimps, oil seeds, grapes, and bananas under the proposed trade deal.
When asked what would happen if the July 9 deadline is not extended, sources said the tax rate of April 2 (26 per cent in India's case) would be reintroduced. They said if the exemption is not extended, India may benefit in some cases and suffer losses in others, especially when compared with other countries. But the US will also be affected due to the high duty (tariff). Sources said there is complete uncertainty on whether the tariff exemption will be extended after July 9.
The Indian delegation may visit the US for the next round of talks. Both countries have set a deadline to complete the first phase of the talks by the end of this year (September-October). However, dates for this have not been decided yet. The US team was present in India for talks from June 5 to 11. In the coming days, these talks will continue both online and face-to-face. India and the US are trying to finalise the interim trade agreement before July 9.
