Officials of India and the US on Saturday concluded a round of talks on a proposed bilateral trade agreement. According to government sources, news is moving forward in a positive direction. The team of US officials in this meeting was led by Brendan Lynch, Assistant US Trade Representative for South and Central Asia.
Trump's statement and the importance of trade agreements
US President Donald Trump described Prime Minister Narendra Modi as a very sensible person and a good friend. He also said that tariff negotiations between the two countries would yield good results. Even before this, Donald Trump has been accusing India of imposing high tariffs on American goods. The US has announced retaliatory tariffs on several countries, which may include India.
US tariffs and impact on India
The US has imposed additional tariffs on China before. Apart from this, 25 percent duty has been imposed on steel and aluminum from March 12. At the same time, 25 percent tariff will be applicable on completely finished vehicles (CBUS) and auto parts from April 3. Along with this, it has been announced to levy a 25 percent duty on countries that buy oil from Venezuela, which may affect oil trade in India.
Target of trade agreement between the two countries
India and the US are aiming to complete the first phase of this agreement by September-October 2025. The two countries are working on a plan to increase bilateral trade to over $500 billion by 2030. America's demand is that tariffs on industrial textiles, automobiles, petrochemicals, dairy, agricultural products should be reduced. At the same time, India's priorities are to stay in the tariff for textiles and other labor-intensive industries. At the same time, Indian industries and exporters are demanding relief from American tariffs from the government. The US is India's largest trading partner, so higher tariffs could hurt Indian exporters.
Key Highlights of the Agreement:
- Targeted Completion Date: The first phase of the agreement is expected to be completed by September-October 2025.
- Bilateral Trade Goal: India and the US aim to increase bilateral trade to over $500 billion by 2030.
- Tariff Reductions: The US is pushing for reduced tariffs on industrial textiles, automobiles, petrochemicals, dairy, and agricultural products, while India prioritizes maintaining tariffs on textiles and labor-intensive industries.
- Relief from American Tariffs: Indian industries and exporters are seeking relief from American tariffs, which could negatively impact Indian exporters given the US is India's largest trading partner.
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