India and the U.S. are very close to a trade agreement and it would materialse when both sides are ready, Commerce Secretary Rajesh Agrawal said Thursday.
The talks between India and US had never broken down and both sides remained engaged, he added. “In the last week of December, Commerce and Industry Minister Piyush Goyal held a virtual meeting with US Trade Representative Jamieson Greer. Negotiating teams are talking virtually on issues that are still pending,” Agrawal said here.
High-Level Diplomatic Push
The December meeting between Goyal and USTR happened after the visit of a delegation of officials from the office USTR to New Delhi on December 10 and 11 led by Deputy USTR Rick Switzer . In January the US ambassador to India Sergio Gor took office and presented his credentials to the President on January 14.
On January 13 External Affairs Minister S Jaishankar had a telephonic conversation with the US Secretary of State Marco Rubio where trade also figured along with critical minerals, nuclear cooperation, defence and energy.
Export Resilience
Despite the 50% tariff by the US on Indian imports, the exports to US are still holding on. In December, India’s merchandise exports to the US were $6.89 billion compared to $7.01 billion in December of last year and $6.98 billion in November.
One of the reasons for it is that some key products like electronics and pharma are outside the reciprocal tariffs and penal duties. On some other products like steel, aluminium and copper the duties are same for all trade partners of the US.
The products that are under pressure in the US market are textile and appeal, leather and marine products where exporters are sacrificing margins to retain the customers. Many exporters in these categories have said that they would not be able to continue for long on this path in the absence of a trade deal that brings down tariffs.
Agrawal agreed that high tariffs definitely must be putting a lot of strain on some of the supply chains to the US. “But that is why, if you remember, one of the key objectives of our Export Promotion Mission and also our engagement with the industry has been to see how we can support diversification,” he added. .
“And that is what I think textile manufacturers are also doing, because we have been able to hold on to the (export) numbers (in this category) despite these tariffs overall.”
In April-December readymade garment exports were $ 11.58 billion as against $ 11.32 billion in the same period of the last financial year. Marine product exports are up 11% on year in April-December to $ 6.36 billion.