What was supposed to wrap up by now, has now extended into its sixth day as negotiations between India and the US on an impending trade pact continue in Washington D.C.
The Indian team, headed by special secretary in the Department of Commerce, Rajesh Agrawal, has extended its stay after the two sides failed to reach an agreement on an interim trade agreement that commenced on June 26.
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Sources say the talks have reached a crucial stay with New Delhi demanding greater market access to US’ labour-intensive goods while seeking duty concessions for its labour-intensive sectors such as textiles, garments, engineering, leather, gems and jewellery, besides plastics, chemicals, shrimp, oil seeds, grapes, and bananas.
The US wants duty concessions on certain industrial goods, automobiles, especially electric vehicles, wines, petrochemical products, dairy, and agricultural items like apples, tree nuts, and genetically modified crops.
The real deal-makers to emerge, however, are India’s agriculture and dairy sectors, with the US demanding duty concessions in both which India finds difficult to concede to, given that Indian farmers are into sustenance farming and own small land holdings.
India has not opened up the dairy sector for any of its trading partners in free trade pacts the country has signed so far.
“If the proposed trade talks fail, the 26 per cent tariffs will come into force again,” an official said.
On April 2, the US imposed an additional 26 per cent reciprocal tariff on Indian goods but suspended it for 90 days, until July 9. However, the 10 per cent baseline tariff imposed by America remains in place. India is seeking full exemption from the additional 26 per cent tariff.
The two countries are also looking to finalise an interim trade pact before concluding talks for the first tranche of the proposed bilateral trade agreement (BTA) by fall (September-October) this year.
The pact is aimed at more than doubling bilateral trade to USD 500 billion by 2030 from the current USD 191 billion.
The US team was in India from June 5 to June 11 for the talks.
The negotiations will continue both virtually and physically in the days to come.
India's merchandise exports to the US rose by 21.78 per cent to USD 17.25 billion in April-May this fiscal, while imports rose by 25.8 per cent to USD 8.87 billion.
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