India and the US are engaged with each other at various levels to build a framework for the proposed bilateral trade agreement (BTA) that would reduce tariff and non-tariff barriers and lead to more trade between the two countries, the Ministry of External Affairs has said.
“The two governments are actively working to build a framework for the BTA, which would aim to expand trade, enhance market access, reduce tariff and non-tariff barriers. The government of India remains engaged with the US administration at various levels to arrive at a mutually beneficial multisector bilateral trade agreement,” MEA Spokesperson Randhir Jaiswal said at a media briefing on Friday.
In talks
With the April 2 date fixed by US President Donald Trump for announcing reciprocal tariffs on “high tariff charging” countries like India less than two weeks away, Commerce & Industry Ministry is in talks with other line Ministries and Departments to finalise items where India could reduce tariffs, which includes not just industrial goods but also some agricultural goods.
“During the initial round of talks between India and the US when Commerce & Industry Minister Piyush Goyal visited Washington DC, it was made clear by the Trump regime that tariff cuts have to be made also for agricultural imports. So, agriculture cannot be off the table completely,” a source tracking the matter told businessline.
Tariff cuts could be contemplated on certain items that may not be very sensitive, such as fruits like apple and various nuts, but there are others like dairy that would be difficult to touch, the source added.
US team coming
While talks between India and the US Trade Representative’s office is already on virtually, there is a possibility that a team from the US Trade Representative’s office may visit New Delhi next week for face-to-face talks, the source said.
It would not be possible for India to take on commitments as early as next week on tariff cuts but it could try to give some indications on what it had in mind. India’s import tariffs are much higher than US for most products.
US’ simple average tariff on imports is 3.3 per cent while India’s is over five times higher at 17 per cent, per WTO figures. US’ trade weighted average tariff is 2.2 per cent while India’s is 12 per cent.
Average applied tariffs on agricultural goods by India is much higher at 39 per cent while the US duties are at 5 per cent.
India, on its own, lowered import duties on a few products of interest to the US in this year’s Union Budget announced on February 1 which included high-end motorbikes and bourbon whisky.
The US was India’s largest trading partner in FY24 with exports worth $77.51 billion and imports worth $42.19 billion.
Trump and Prime Minister Narendra Modi had agreed on working out a BTA that would increase bilateral trade to $500 billion by 2030 and create a more level playing field between the two countries. The first tranche of the BTA is expected by the Fall of 2025 and New Delhi wants the US to not apply its reciprocal tariffs on India till then.
