Commerce & Industry Minister Piyush Goyal wrapped up his week-long trade meeting with his American counterparts in Washington DC on Thursday to advance the proposed mutually beneficial India-US bilateral trade agreement. But American expectations of a “macro, large scale, broad-based trade agreement” that would also include agriculture, may make the going harder for New Delhi as talks progress. India draws a line in the sand on agriculture and maintains tariffs at a level that would cushion farmers against being swamped by agri imports from the developed world.
“It is time to do something big, something grand..Something that connects India and US together. Something broad scale, not product by product. Let us bring India’s tariff policy towards America down. And America will invite India in to have an extraordinary opportunity and relationship with us,” US Commerce Secretary Howard Lutnick said, speaking to an Indian TV channel on Friday.
While the US rates on Indian products are around 3.83 per cent (2022), India’s tariffs are much higher at 15.30 per cent.
India was more circumspect. Elaborating on Goyal’s visit to the US this week, Ministry of External Affairs (MEA) Spokesperson Randhir Jaiswal said the Minister met his counterparts as part of ongoing efforts to advance the BTA. “Our objective through BTA is to strengthen and deepen India-US two-way trade in the goods and services sector, increase market access, reduce tariff and non-tariff barriers, and deepen supply chain integration between the two countries,” Jaiswal said at a media briefing on Friday.
However, India’s proposals and offers for increased market access made so far may not have been enough to assuage US President Donald Trump who yet again labelled India as a “very high tariff nation” and said he looked forward to April 2 when reciprocal tariffs would be imposed.
“And the big one will be on April 2, when reciprocal tariffs, so if India or China, or any of the countries that really…India is a very high tariff nation,” Trump said on Thursday at the Oval office.
There will be no getting out of the tariffs, the US President underlined. “Because we’ve been ripped off by every country in the world, and now whatever they charge us…we’re going to charge them, and there’ll be no getting out of it. So we look forward to April 2… And that’ll be something very big,” Trump said.
India had been hopeful that the proposed BTA, that Trump and Indian Prime Minister Narendra Modi agreed to work out last month during the latter’s US visit, would help take care of the reciprocal tariff threats and the steel and aluminium tariffs of 25 per cent set to be applicable from March 12.
There are a number of items, for example electronics or autos and bikes, where Indian industry will not be majorly affected if tariffs were to be brought down considerably, another source said adding that India was trying to identify these items.
But Lutnick, who met Goyal this week, indicated that all products much be included, even agriculture.
“The Indian market for agriculture has to open up…Now how you do that, the scale in which you do that (has to be seen). Maybe we should have quotas. Have limits. Be smarter when you have your most important trading partner on the other side of the table. You can’t say it is off the table,” Lutnick said.
The US is India’s top export destination. India’s trade surplus with the US was at around $35 billion in FY 24 as it exported goods worth $77.5 billion.
