As India and the US continue making progress in their talks on a trade agreement, an American delegation will visit India in the second half of August for further negotiations.
Both countries are aiming to agree on an interim trade deal before the August 1 deadline announced by US President Donald Trump, while negotiations on a broad trade deal for the first phase of a comprehensive accord continue in parallel.
As per a government official quoted by PTI, the fifth round of talks ended last week in Washington when important deliberations were held between Indian and US officials.
At the helm of the negotiations were India's chief negotiator and Special Secretary in the Department of Commerce Rajesh Agrawal and Brendan Lynch, the Assistant US Trade Representative for South and Central Asia. "For the next round of talks, US team will visit India in the second half of August," confirmed the official.
On whether there can be an interim deal by the deadline of August 1, the official said negotiations were still ongoing, but no ultimate announcement had been made.
Among the priority items in the fifth round were problems regarding tariff barriers for agriculture and the automobile sector, as well as measures to cope with non-market economy challenges. SCOMET (Special Chemicals, Organisms, Materials, Equipment, and Technologies) related matters were also discussed.
India has been adamant about not lowering import tariffs on farm and dairy products, especially stressing that it never provides such concessions in trade negotiations with any partner nation. The dairy industry is still a red line for New Delhi. Some local farming associations have also requested the government to keep agriculture out of the trade negotiations altogether.
At the same time, India is asking the US to lift the additional tariff of 26% and is also asking for relief from the duties imposed on steel and aluminium (50%) and auto imports (25%).
India also asks for preferential duty advantage for its labour-intensive primary industries like textiles, leather, gems and jewellery, chemicals, garments, shrimp, plastics, oil seeds, bananas, and grapes.
On the contrary, the US is calling for reductions in tariffs on a variety of products, such as industrial products, electric cars, wines, petrochemicals, agricultural products, dairy products, apples, tree nuts, and genetically modified plant types.
President Trump had earlier, on April 2, announced plans for reciprocal tariffs targeting several countries. Implementation of those tariffs was initially delayed for 90 days until July 9, and then extended again until August 1 to allow time for trade negotiations, including with India.
Though India remains firm on its World Trade Organization (WTO)-supported right to impose retaliatory duty where necessary, it is also optimistic of moving towards a mutually favorable agreement. Both countries are trying to finalize the first phase of the trade agreement by September or October this year, hoping to seal an interim agreement before that.
Recent trade data reinforce the significance of the relationship: India's merchandise exports to the US jumped 22.8% to $25.51 billion in April–June of the current fiscal year, while imports from the US increased 11.68% to $12.86 billion.
The planned visit next month by the US delegation is likely to further pin down pending issues and lay the groundwork for a potential breakthrough before crucial deadlines.
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