Washington. India and America (India and America) are working rapidly towards an interim trade agreement, which can bring the proposed tariff below 20%. This agreement will keep India in a commercially better position than other countries of the region. According to the news, the US will not give formal information to India to increase tariffs this week, while many other countries have faced tariffs up to 50% unexpectedly. Trump has sent letters to about 20 countries to install tariffs. In which very strict warnings and threats have been given. However, India is not yet intended to send any such letter. The reason for this is the ongoing trade talks between the two countries.
India can be brought below 20%
Bloomberg quoted sources as saying that this proposed interim agreement will give time to both countries for further dialogue, which will give India an opportunity to resolve pending issues before a comprehensive agreement. The agreement can be formally announced through an official statement. According to the report, initially the US had proposed a 26% tariff to India, but now this rate can be reduced to below 20%. Also, under the final agreement, there will be a possibility of further amendment. However, the exact deadline of the interim agreement is not yet clear.
If this agreement is finalized, India will join select countries that have entered into trade agreements with the Trump administration. Till now only Britain has signed a formal trade agreement with the US. At the same time, countries like Vietnam and the Philippines have been declared fee rates of up to 20%, while Laos and Myanmar are facing up to 40% high fees. India wants a more favorable agreement than the agreement with Vietnam. Vietnam was shocked at a high fee rate of 20% and is now demanding to reduce that rate.
Many countries on trump target
US President Donald Trump on Thursday told NBC News that he is considering imposing a normal tariff rate of 15% to 20% on countries who have not yet fixed any special tariff rate with the US. Currently the average tariff rate for most American trading partners is 10%.
Although India started trade talks with the US at the beginning of the year, there has been some tension in the Indo-US trade relations in recent months. There have also been indications from the Trump administration to impose additional fees for India’s BRICS membership. The Indian dialogue may soon travel to Washington so that business talks can be accelerated. According to the report, India has already made its last offer to the US and has clearly adopted a ‘non-understanding stance’ on some issues.
India told its “Laxman Rekha”
The biggest hurdle in trade talks is America’s demand that India allow the bi-composed (GM) crops, which India has turned down due to farmers’ concerns. Apart from this, non-tariff barriers in the agriculture sector and regulatory challenges in the pharma sector also remain the major barrier. India has made its position clear for this agreement, especially in agriculture and dairy areas. Indian negotiators have clearly described the US as their “Laxman Rekha”, which includes concessions on dairy and agricultural products.
India has previously preserved its dairy sector in all trade agreements and this time has taken the same stand. Instead, India has offered a better market access to American products in labor-dominated areas such as textile and footwear. A team from the Ministry of Commerce of Commerce is soon visiting Washington to lead the agreement to be carried forward. India has already put its best offer in front of the Trump administration, in which it has been clarified that it will not compromise on some issues.
