US President Donald Trump has suggested that the ongoing US-India trade talks are on the right track, and that the proposed deal may be on the lines of what America has finalised with Indonesia on Tuesday.
While the Indian team is currently in Washington for the fifth round of negotiations for the proposed bilateral trade agreement (BTA), Trump sounded confident when telling reporters that the US is “going to have access into India”.
“We are going to have access into India. You have to understand, we had no access to any of these countries. Our people couldn't go in, and now we are getting access because of what we are doing with the tariffs…” he said.
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Under the US-Indonesia trade pact, the US will have complete access to Indonesia’s market, while the Southeast Asian nation’s goods would attract a 19 per cent duty in America. Additionally, Indonesia has committed to purchasing USD 15 billion in US energy, USD 4.5 billion in American Agricultural Products, and 50 Boeing jets.
“India is basically working along that same line,” Trump said, with reference to the India-US deal, which had previously faced roadblocks in issues surrounding the agriculture, dairy, and automobile sectors.
After Trump announced sweeping tariffs on ‘Liberation Day’ on April 2, he later postponed the levy of the tariffs to July 9, and now, to August 1.
India and the US are looking to conclude talks for the first tranche of the proposed BTA by fall (September-October) this year, before which, they hope to lock an interim trade pact.
Commenting on Trump's remarks, economic think tank GTRI said that any such “lopsided” arrangement with the US could expose India’s domestic sectors to duty-free US goods, while India gains little in return.
“A bad deal, especially one that removes India's tariffs without reciprocal benefits, could be worse than no deal at all,” said GTRI founder, Ajay Srivastava, adding that India must therefore negotiate transparently, guard against one-sided outcomes, and not succumb to pressure for quick, symbolic agreements that compromise long-term economic interests.
The only India-US stand-off so far has come from the US’s insistence on duty concessions on agri and dairy products as well as certain industrial goods, automobiles including electric vehicles, wines, petrochemical products, apples, tree nuts, and genetically-modified crops.
India has so far not opened its agricultural market to any country in any free trade pact.
It is seeking the removal of the additional tariffs of 26 per cent announced by Trump on April 2, as well as easing of the 50 per cent tariffs on steel and aluminium, and 25 per cent on the auto sector. Against these, India has reserved its right under the WTO (World Trade Organization) norms to impose retaliatory duties.
India is also seeking duty concessions for labour-intensive sectors, such as textiles, gems and jewellery, leather goods, garments, plastics, chemicals, shrimp, oil seeds, grapes, and bananas in the proposed trade pact.
India's merchandise exports to the US rose 21.78 per cent to USD 17.25 billion in April-May this fiscal year, while imports rose 25.8 per cent to USD 8.87 billion.
India-UK trade deal may be signed next week
India and the UK are expected to sign the Free Trade Agreement (FTA) next week, a government official said.
The conclusion of negotiations between the two countries was announced on May 6 this year.
The pact, which aims to boost trade and investment between India and the UK, will remove taxes on the export of labour-intensive products such as leather, footwear and clothing, while making imports of whisky and cars from Britain cheaper.
The two nations hope to double trade between them to USD 120 billion by 2030.
"The process of legal scrubbing of the FTA text is going on. It is expected to be signed next week," the official said.
Once the FTA is signed, it will require approval from the British Parliament and India's Cabinet before it can take effect.
The implementation is likely to take about a year after the signing.
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