India will use the dialogue mechanism put in place for the Bilateral Trade Agreement (BTA) to deal with the reciprocal tariffs imposed by the US, a government source said on Thursday. “The BTA is a pathway, a window to get these rescinded or settle these bilaterally. Through the BTA we will resolve all outstanding issues,” the official, who did not wish to be identified, said.
“India has got an early mover advantage,” the official added, referring to the possibility of many other countries too opting for bilateral talks with the world’s largest economy. India and the US have been engaged over the last 50 days on BTA and are working with a tight deadline to conclude by fall of 2025.
India is the only country where the US has sent a team outside for trade discussions. The US team led by Assistant US Trade Representative for South and Central Asia Brendan Lynch was in New Delhi last week for talks on BTA. The talks that were to last for three days went on for four days instead.“There has been real progress in talks,” the official added.
Sector experts on both sides will start discussions this month virtually and in May there could be a physical meeting between both sides. “India is on an advanced curve with BTA not only because India wanted it but because the US also wanted it,” the official added.
New Delhi’s focus on talks to cope with the additional tariffs is despite some countries signalling retailatory action against the US.
Now facing 54% tariffs on exports to the US, China on Thursday vowed countermeasures, as did the European Union.
The government sees imposition of worldwide additional tariffs by the US as a mixed bag with increased opportunities for six-seven key sectors including electronics and textiles.
A press statement said the Department of Commerce is carefully examining the implications of the various measures and announcements made by the President of the USA. “The department is engaged with all stakeholders, including Indian industry and exporters, taking feedback of their assessment of the tariffs and assessing the situation. It is also studying the opportunities that may arise due to this new development in the US trade policy,” the statement added.
The worldwide tariff disturbance is expected to shrink global trade. “If there is a global trade contraction. It will be the same for everyone and would not put India at a comparative disadvantage. India should be able to navigate these challenges well,” the official added.