“India never negotiates trade deals on deadlines,” commerce and industry minister Piyush Goyal said on Friday in what’s seen to convey a stern message to Washington that strong-arm tactics won’t help in concluding the high-stakes bilateral trade deal between the two nations.
“Trade agreements are possible only when both sides get benefits. It should be a win-win agreement, and national interest should always be supreme,” the minister said here.
Earlier in the day, a team of Indian negotiators led by additional secretary Rajesh Agarwal returned from Washington after seven days of intensive engagements with their US counterparts. The intent was to hammer out a mutually beneficial interim trade deal.
Asked whether he would be going to the US in near future, Goyal replied in negative.
The US had earlier set a deadline for most of its trading partners to strike trade deals involving tariff cuts during a 90-day pause from the so-called steep reciprocal tariffs announced earlier by it. In India’s case, the extra tariff proposed was 26%.
Sources indicated that differences remain on the liberalisation of trade in agriculture and automobiles for the US, for the proposed interim deal, which is seen a prelude to a broader bilateral trade agreement (BTA).
Though the minister’s statement signalled India’s discomfiture with the US stand on some aspects of the trade deal, a potential announcement of the deal could still take place soon. Despite the differences remaining with regard to some key sectors, both sides will remain engaged and expect to finalise the early tranche of the BTA before July 9, a senior official said.
Apart from exemption from reciprocal tariffs of 26%, India is also seeking to avoid extra duties on steel, aluminium, auto and auto parts. While bilateral negotiations on these issues continue, India has reserved its right to retaliate against the additional sector-specific tariffs. India has also informed the US of its decision to respond to extra duties through the World Trade Organization (WTO).
The US is aggressively pursuing the opening up of India’s agriculture market for its farmers through duty cuts and permissions to sell genetically modified products in India. It also wants India to lower duties on automobiles and more purchases by it of energy products. While protecting its farmers’ interests especially in dairy sector and cereals like wheat and rice, India has sought greater market access for its labour intensive and emerging sectors of manufacturing like electronics.
Apart from goods trade, the other objective of the US in these negotiations is to get a more liberal regulatory climate for its technology companies in India. The strategic partnership between the two countries is also guiding the approach in the talks. The trade deal may be sweetened with India purchasing more defence equipment from the US.
The deal between India and the US goes beyond trade and both sides are keen to preserve the relationship. The US remains the biggest market for India’s exports and the only major economy with which it enjoys a trade surplus.