Countdown to July 9: Indian trade team returns from US, deal progress awaited

The Indian trade delegation, led by chief negotiator Rajesh Agrawal, has returned to New Delhi after completing a round of discussions in Washington regarding an interim trade agreement. Despite the progress made, further negotiations are required due to unresolved matters in the agriculture and automotive sectors. The talks are anticipated to conclude by July 9, according to official sources. "Indian team is back from Washington. Negotiations will continue. There are certain issues which need to be resolved in agriculture and auto sectors," stated an official.

The discussions, which took place from 26 June to 2 July, are crucial as they coincide with the upcoming expiration of the suspension of reciprocal tariffs imposed by the US. Both nations aim to finalise the interim agreement before this deadline. India, taking a firm stance, seeks to exempt its goods from the additional tariffs while maintaining its position on sensitive sectors like dairy, further complicating the negotiations.

India is pushing for duty concessions on various labour-intensive sectors, including textiles, gems, jewellery, leather goods, garments, plastics, and chemicals. This agreement is an essential step towards a broader bilateral trade agreement (BTA) expected by September-October this year, which aims to more than double bilateral trade to USD 500 billion by 2030, from the current USD 191 billion.

Meanwhile, US President Donald Trump has indicated a broader simplification of trade terms with multiple countries. "My inclination is to send a letter out and say what tariffs countries are going to pay. We have more than 170 countries. And how many deals can you make? And you can make good deals, but they’re very much more complicated," Trump stated, emphasising a straightforward approach to international trade.

The US is seeking duty reductions on industrial goods, automobiles, especially electric vehicles, and various agricultural products. The Indian government, however, remains resistant to opening its dairy market, a politically sensitive sector.

Trump's announcement of reciprocal tariffs, set to resume on July 9, adds urgency to these negotiations. The US had previously placed an additional 26 per cent reciprocal tariff on Indian goods, suspended for 90 days. India's merchandise exports to the US increased by 21.78 per cent to USD 17.25 billion in the first two months of this fiscal year, while imports rose by 25.8 per cent to USD 8.87 billion.

As the deadline approaches, both countries are under pressure to resolve outstanding issues and facilitate smoother trade relations. "I’d rather just do a simple deal where you can maintain it and control it. You’re going to pay a 20 per cent or 30 per cent tariff, and we’re going to be sending some letters out, starting probably tomorrow, maybe 10 a day, to various countries, saying what they’re going to pay to do business with the US," Trump added, underlining his administration's approach to trade negotiations.

(With PTI and Reuters inputs)