India and the US have kicked off their latest round of engagement on the first tranche of the Bilateral Trade Agreement (BTA) with a meeting between commerce and industry Minister Piyush Goyal and US Trade Representative Jamieson Greer.
The Indian delegation led by Goyal and lead chief negotiator and special secretary Rajesh Agarwal reached New York on Monday, where the meeting with Greer was held.
After the ministerial meeting, officials from both sides are continuing with the engagement, sources said. The current meetings have not been designated officially as the sixth round of talks on the BTA. While officials engage, the commerce and industry minister is staying in the US along with the Indian negotiators to guide the discussions.
There has been no word on the nature of discussions during the ongoing visit of the Indian delegation to the US from either side/ Commerce Ministry also refused any comment on this issue.
Tariff tensions stall progress
The talks on the agreement have not progressed in a structured way after the five rounds as the sixth round that was scheduled for August 25 got postponed. The trigger for postponement was the additional 25% tariffs imposed on India for buying Russian crude oil.
These extra duties raised additional tariffs on India’s exports to the US to 50%, the highest for any country.
After a few days of quiet after the tariff blow, Prime Minister Narendra Modi and US President Donald Trump again spoke to each other and trade officials again got talking. On 16th September the officials from the office of the USTR visited India. Discussions were held on various aspects of the trade deal and it was decided to intensify efforts for an agreement.
The Indian team’s visit to the US is in continuation of the efforts. Just prior to this visit the increase in fee for fresh H1B visas has emerged as an irritant. In trade talks his issue could also figure after high tariffs have been dealt with.
Impact on trade flows
“We’ve already seen the measures we’ve taken with regards to India, although that’s something we hope we can fix,’ US secretary of state Marco Rubio said in an interview with NBC while advocating that Europe should impose sanctions on Russia and stop oil purchases from it as a way to end Russia-Ukraine conflict.
Tariff certainty is key to India’s exports to the US. Since the US started pulling up its tariffs India’s exports to the US are slowing down. The exports to the US in May were $ 8.83 billion and by August they dropped to $ 6.87 billion, according to an analysis by Global Trade Research Initiative (GTRI).
In April the US imposed 10% additional tariffs on all imports from trade partners. From August 7 this duty was raised to 25% for India. By August 27 the duties had gone up to 50%.
As Goyal met Greer, external affairs minister S Jaishankar met Rubio on the sidelines of the United Nations General Assembly in New York.
In a readout of the meeting between the two the US state department said,”Rubio, reiterating that India is a relationship of critical importance to the United States, expressed his appreciation for the Indian government’s continued engagement on a number of issues including trade, defense, energy, pharmaceuticals, critical minerals, and other items related to the bilateral relationship.”