VISAKHAPATNAM: A day after India and the United States concluded another round of negotiations, commerce and industry minister Piyush Goyal stated on Friday that the two nations are progressing toward finalizing an interim trade agreement. The first tranche of the trade deal is anticipated to be executed by mid-July.
Progress on Trade Negotiations
“I also met with them yesterday, and we are fast moving towards closing all the open ends. Sometime by the middle of next month or so, we should be in a position to execute a very, very vibrant first tranche. It is only the first tranche of our bilateral trade agreement, which will give preferential access to India over our competitors,” Goyal said. A high-level American team is expected to visit India toward the end of June, possibly led by US Trade Representative (USTR) Jamieson Greer, according to government officials.
Timeline and Tariff Context
The trade deal coincides with the 150-day period of an additional 10% duty currently in place, which is set to expire by July 22. Earlier this week, the USTR office proposed 12.5% additional tariffs on India and over 50 other countries for failing to curb imports of goods using forced labor. A second report on this matter is also expected. Government officials view these proposed tariffs as a negotiating tool by the US, given that the Trump administration has limited options to impose fresh duties. The tariffs proposed under Section 301 are seen as a replacement for the interim 10% tariffs.
While the text of the agreement is being prepared, a final decision on the new levy will depend on how the USTR handles the outcome of two investigations, with hearings scheduled for early next month.
Strategic Importance for India
Given that the United States is the largest destination for India’s exports, the Indian government has little choice but to negotiate an agreement, similar to other countries, while seeking to secure a comparative tariff advantage over rival nations.
On February 7, India and the US issued a joint statement finalizing the contours or framework of the first phase of the Bilateral Trade Agreement (BTA) or an interim trade deal, which included an 18% additional import duty on all Indian exports. However, it was put on hold after the US Supreme Court invalidated the reciprocal tariffs, terming them illegal. After finalizing the framework for the first tranche, the two countries are now working to finalize the details of the interim trade pact and advance negotiations for a broader agreement.
