The government on Monday made it clear that it hasn’t made any tariff reduction commitments to the US yet. This refutes the statement made by US President Donald Trump last week that New Delhi agreed to cut its tariffs “way down” after having being “exposed” charging high import taxes. However, commerce secretary Sunil Barthwal told a parliamentary committee that while no such pledges have been made, the government continues to engage with the US for a bilateral trade agreement.
On Friday, US commerce secretary Howard Lutnick had said what Washington is looking for a “macro and grand” deal with India, rather than product-by-product negotiations. It isn’t clear if the agreement, for which a deadline of the fall of 2025 was set by Prime Minister Narendra Modi and Trump during the former’s visit to the US last month, will be concluded before April 2, the day Washington puts into effect its reciprocal tariff policy for most trade partners. Canada, Mexico and China are not part of April 2 plans as specific additional tariffs have already been announced for these countries.
Briefing the Standing Committee on External Affairs headed by Opposition MP Shashi Tharoor on “current developments in India’s foreign trade and policy”, Barthwal said India is in discussions with the US and is trying to work out a deal which is “mutually beneficial” to both the countries. “The US has officially not imposed any tariffs so far on India unlike Mexico, Canada and China. So, the government is in a wait-and-watch mode,” the secretary told the standing committee. “Since the US is one of the biggest trading partners, India is treading with adequate caution. New Delhi does not want to lose the US and also does not want to give up its own interests,” he added.
The briefing by the commerce secretary came just a day after commerce minister Piyush Goyal returned from a week-long visit to the US to further the discussions on the trade agreement and related matters. The commerce ministry will also be meeting exporters on Thursday to discuss the reciprocal tariffs and issues around trade agreement with the US. According to sources, exporters have been asked to give data and inputs on their US sales as well as about the domestic market and cost dynamics. Exporters said they would seek “clarity” from the government on Goyal’s visit, what the US intends to do and how India intends to counter it.
While India engages with the US, the government is also in regular touch with the export promotion organisations and industry chambers, seeking their inputs on the extent of their exposure to the US market.
The US intends to impose reciprocal tariffs from April 2 and has singled out India for the tariff action. During his week-long visit, Goyal is believed to have held talks with US trade representative Jamieson Greer as well as Lutnick.
While Trump has talked of tariffs and non-tariff barriers, Lutnick has gone on to say that the BTA should not confine itself to tinkering of tariffs but should have a broad vision that leads even to the opening up of Indian agriculture markets. In the broader trade deal, the US might not just seek tariff concessions, but also ask for opening up government procurement for US companies, reduction of agriculture subsidies, change of patent laws for the benefit of US pharma companies and unrestricted data flows, according to experts.
