India-US trade deal: New Delhi should tread cautiously – What experts say as Trump admin sends letters to 24 countries
The US has shot off letters to 24 countries and the EU imposing tariffs that are as high as 50 per cent on Brazil. On its key trading partners like the EU and Mexico, 30 per cent duties have been proposed from August 1.
Economic think tank GTRI (global Trade Research Initiative) said India must recognise that it is not alone in facing US pressure.
The US is currently negotiating with over 20 countries and seeking concessions from more than 90.
GTRI Founder Ajay Srivastava said that both the EU and Mexico are major trade partners of the US, and Washington can impose tariffs on them to pressure them into quick deals, India cannot expect a balanced deal.
Another trade expert said India should tread cautiously while negotiating the trade pact with the US.
From Japan and South Korea to the EU and Australia, countries are resisting Trump's trade deals that demand tariff cuts without reciprocal US concessions, mandate guaranteed purchases of American goods, and leave the door open for future tariffs even after a deal is signed, the GTRI said.
A team of Indian trade negotiators will soon visit Washington to further talks for the proposed Bilateral Trade Agreement (BTA).
"India should stay the course and avoid trading away core sectors like agriculture. A hasty deal under pressure could have irreversible consequences, especially when such agreements may not survive the next shift in US politics," Srivastava said.
India is working to negotiate and finalise a trade deal with the United States, said Rajesh Agrawal, Special Secretary in the Department of Commerce, on Thursday.
Agrawal, who is also leading the talks for this proposed India-US trade deal, said both countries hope to complete the first phase of the agreement by autumn (September-October) this year. Before that, they aim to finalise an interim trade deal.
He also mentioned that India has already signed more than 14 Free Trade Agreements (FTAs) with 26 countries.
India's exports and imports have crossed $1,150 billion, so "logistics is important", he said, adding logistics will play a key role in increasing India's share in world trade to 10 per cent in the coming years.
At present, the share is about 2 per cent.
Further, he said reduction in tariffs due to free trade agreements, harmonisation of regulations and efficient logistics ecosystem has promoted strengthening of global value chains (GVCs) in the last two-three decades.
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