Latest news with #India-USBilateralTradeAgreement
Time of India
19-07-2025
- Business
- Time of India
India-US trade deal: Fifth round over, India is not budging
India has once again signaled its steadfast approach to international trade negotiations , as the fifth round of talks for the proposed India-US Bilateral Trade Agreement (BTA) concluded in Washington this week. Led by Rajesh Agrawal , India's chief negotiator and Special Secretary in the Department of Commerce, the Indian delegation engaged in four days of deliberations with their American counterparts from July 14 to 17. The return of the negotiating team marks a critical juncture in the ongoing dialogue, which seems to remain mired in unresolved issues. Union Commerce and Industry Minister Piyush Goyal 's firm remarks on Saturday, following the conclusion of this latest round, make it unequivocally clear that India will not be rushed or coerced into finalizing a trade deal that does not align with its national interests. Speaking at a function hosted by ASSOCHAM (Associated Chambers of Commerce and Industry of India), Goyal asserted, 'If India gets a good trade deal, we will go ahead with it. If not, we won't. India always keeps the country's interest first.' Explore courses from Top Institutes in Select a Course Category MBA Project Management Data Analytics Data Science PGDM Digital Marketing Leadership healthcare Others others MCA Operations Management Cybersecurity Public Policy Degree Finance Technology Design Thinking Healthcare Product Management Artificial Intelligence Data Science CXO Management Skills you'll gain: Financial Management Team Leadership & Collaboration Financial Reporting & Analysis Advocacy Strategies for Leadership Duration: 18 Months UMass Global Master of Business Administration (MBA) Starts on May 13, 2024 Get Details Skills you'll gain: Analytical Skills Financial Literacy Leadership and Management Skills Strategic Thinking Duration: 24 Months Vellore Institute of Technology VIT Online MBA Starts on Aug 14, 2024 Get Details Strategic patience over speed This declaration reiterates a central theme that has characterized India's approach under the current administration: strategic patience over external pressure. Earlier this month, on July 5, Goyal had emphasized that India negotiates from a "position of strength," not according to imposed deadlines, a clear response to the July 9 timeline previously set by US President Donald Trump, which was later pushed to August 1. Goyal's consistent messaging suggests India is uninterested in symbolic or hurried agreements driven by political timelines in Washington. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Ringing in The Ears? Do This Immediately! Live Happier Click Here Undo This approach is particularly significant in the current global trade environment , where developed economies, including the US, are looking to restructure key trade relationships in the wake of changing geopolitical dynamics and economic realignments post-COVID and amid ongoing global supply chain shifts. India's posture underscores its growing economic self-assurance. While the US seeks deeper market access in areas such as agriculture, digital trade, intellectual property rights and medical devices, India is focused on securing greater access for its IT services, textiles and pharmaceuticals, while protecting sensitive sectors like agriculture and dairy from potential disruption. Live Events In line with this, India's trade negotiators have reportedly resisted US attempts to extract concessions in sectors where India remains cautious, particularly on agriculture and dairy. By refusing to compromise prematurely, India appears to be echoing its broader trade philosophy which is balancing globalization with the protection of domestic industry and livelihoods. Goyal's recent remarks further reinforce this narrative, portraying a government that remains keen to avoid repeating past mistakes of asymmetrical agreements. 'No negotiation through media' Adding to his resolute tone, Goyal also took a swipe at attempts to influence public opinion during sensitive negotiations. 'I've already mentioned that we don't negotiate through media, we negotiate in the negotiating room. Talks are ongoing, and once the team is back, we will get feedback on the response and the progress,' he told reporters, highlighting New Delhi's disciplined and professional handling of the talks. This was likely in response to leaked or unofficial reports attempting to project the US as driving progress while India remains hesitant. This statement can be interpreted as a subtle critique of Washington's pressure tactics, including setting public deadlines and possibly shaping narratives through the media. India's choice to avoid reactive diplomacy and instead stick to official channels is consistent with its desire to maintain autonomy and dignity in international dealings. What lies ahead While the fifth round of talks has concluded, both sides seem to have left the door open. India is expected to analyze the outcomes internally and recalibrate its strategy accordingly. Yet, what is increasingly clear is that India is not desperate for a deal. As Minister Goyal's statements suggest, the current government is not interested in optics but in substance, a fair and mutually beneficial agreement. In a world increasingly shaped by economic nationalism and realpolitik, India's measured and self-assured stance may set a template for other emerging economies negotiating with larger powers. By refusing to blink in the face of deadlines and media narratives, India is not just negotiating a trade deal, but reaffirming its position as a sovereign and assertive player in the global economic order. India's response after the fifth round of the India-US BTA talks reflects a firm, principle-driven approach to trade negotiations. Minister Goyal's reiteration that 'India always keeps the country's interest first' is not just rhetoric but a policy stance backed by a clear track record. Whether or not a deal is signed by August 1, India's message is clear: deals will be made on its terms, not under pressure.
New Indian Express
12-07-2025
- Business
- New Indian Express
Key issues that could jeopardise India-U.S. trade talks
The India-US Bilateral Trade Agreement (BTA) is yet to see the light of day. The July 9 deadline — marking the end of the 90-day exemption period for the imposition of reciprocal tariffs by the US — just passed by without a deal. Now, a new deadline has emerged: August 1. India was the first country to initiate Free Trade Agreement (FTA) talks with the US after its newly elected President Donald Trump threatened high tariffs on countries running trade surpluses with Washington. With a trade deficit of over $40 billion in favour of India, Trump repeatedly took jabs at India, dubbing it the 'Tariff King'. While India began negotiations aiming to 'pacify' Trump, whose unpredictable stance on tariffs and trade unsettled many, it soon became clear that the US was seeking far more than symbolic gestures. As talks progressed, India toughened its position on several issues, leading to the current stalemate. In a last-ditch effort ahead of the new deadline, a team of Indian negotiators is likely to visit the US soon to iron out the remaining differences. While dates are yet to be finalised, the team may travel to Washington next week. Meanwhile, India's stance appears to have shifted — indicating it would rather have no deal than accept a bad one. Contentious issues There are multiple sticking points between the two countries, with the most contentious being tariffs on agriculture, dairy products, automobiles & auto components, and steel. Beyond tariffs, the US is also reportedly pushing for large-scale commercial deals involving oil and LNG, civilian and military aircraft from Boeing, helicopters, and nuclear reactors. Washington may additionally be urging New Delhi to ease FDI restrictions in multi-brand retail, benefiting companies like Amazon and Walmart. India, for its part, is determined to safeguard the livelihood of its farmers and over 8 million dairy cooperative members, as well as protect MSMEs and labour-intensive sectors from potential adverse impacts of the deal. Agriculture & related concerns The pressure on Indian negotiators to protect farmers' interests is immense. According to Ajay Srivastava, founder of GTRI, agricultural goods make up less than 5% of US exports to India, yet Washington is aggressively pushing on this front. He warns that any tariff concessions could embolden the US to later demand dilution of India's minimum support prices (MSP) and public procurement systems — pillars of India's food security framework. Ashwani Mahajan, National Co-Convener of the Swadeshi Jagaran Manch (SJM), sees this as a major red flag. 'International prices of agricultural goods are half of the MSP provided by India. Any compromise on agricultural goods in the trade talks could jeopardise the livelihoods of thousands of farmers,' he says. A March report by the Office of the United States Trade Representative (USTR) flagged India's farm subsidies, particularly the MSP system for rice and wheat, as distorting global prices and disadvantaging US farmers. Currently, Indian farm exports to the US face a modest 5.3% tariff, while US farm exports to India are hit with a much steeper 37.7% tariff — a 32.4% gap. At a proposed 26% reciprocal tariff, Indian agri exports could be more heavily taxed in the US, while lowering tariffs on US farm imports might flood Indian markets with cheaper goods. Disagreements on dairy sector On dairy, the US argues that India's GM-free feed certification and facility registration protocols effectively amount to a ban on American dairy imports. Indian rules prohibit imports of animal products fed on animal-derived feed — for example, butter from cows fed meat — due to deep religious sensitivities. India considers this policy non-negotiable. Pushback on GM crops The US has also been pressing India to allow imports of GM crops such as soybean meal and distillers dried grains with solubles (DDGS) for animal feed, a demand that has faced growing opposition in India. Initially, the Indian government did not strongly oppose the idea of some tariff cuts on farm goods or even selective GM imports. A Niti Aayog report earlier this year argued that the US would remain a key market for India's surplus food exports, suggesting that a 'strategic opening for US imports' could help secure broader export gains. The report even proposed importing GM soybean seeds under a controlled model, where seeds would be crushed at coastal facilities, oil sold domestically, and soymeal (with GM traits) exported to avoid domestic contamination. However, experts cautioned that enforcing tight control on GM material would be nearly impossible given India's weak regulatory oversight, fragmented supply chains, and informal markets. 'Once GM products enter the country, there is a high risk they will leak into domestic agriculture, raising serious concerns over food safety, environmental impact, and potential export bans from countries that don't accept GM contamination,' one expert noted. Following public outrage, Niti Aayog quietly withdrew the report. Auto components The US has already slapped a 25% tariff on auto and auto components. While India's passenger vehicle exports to the US are minimal (just 0.21%), auto components make up 28% of India's total exports to the US. This high tariff thus poses a serious threat to revenues of Indian component manufacturers. According to an ICRA report, the recent US tariff hikes could add roughly `9,000 crore in costs across the supply chain, ultimately to be borne by US consumers, importers and Indian exporters. 'The extent to which Indian auto component exporters absorb this burden will depend on their competitiveness and the price elasticity of exported products,' ICRA noted. India has since notified the World Trade Organization (WTO) of its intention to impose retaliatory tariffs on select US auto parts, targeting exports valued at approximately $2.9 billion annually, with the duties expected to yield an additional $723 million. Steel & aluminium Similarly, the US has imposed a steep 50% tariff on steel and aluminium, directly impacting India. In FY2025, India exported $4.56 billion worth of iron, steel and aluminium products to the US, including $587 million in iron and steel, $3.1 billion in articles of iron or steel, and $860 million in aluminium and related products. These exports are now vulnerable to sharply higher tariffs, threatening profitability. India has already filed a formal notice at the WTO outlining plans to impose retaliatory tariffs on US goods. Domestically, the US move has also resulted in a surge of cheaper Chinese imports into India, prompting New Delhi to impose a 12% safeguard duty on steel imports. However, a 50% tariff is seen as unsustainable, and Indian negotiators have reportedly raised the issue with Washington. Beyond tariffs: Other friction points The BTA negotiations are not confined to tariffs alone. The USTR report cited earlier also highlighted India's restrictive digital trade rules, weak intellectual property enforcement, and opaque procurement practices as key hurdles for US businesses. The USTR flagged India's Digital Personal Data Protection Act (DPDPA) for restricting cross-border data transfers and mandating data localisation. As mentioned earlier, agriculture subsidy remains another key point of difference between the two countries. While India has expressed interest in striking a mini deal before the August 1 deadline that focuses solely on tariffs, it remains to be seen if the US is willing to temporarily set aside more contentious issues such as IP and farm subsidies. In the case of a no deal, India would be hoping the US levies a lower tariff (lower than 26% announced earlier) on its goods exported to the US.
Mint
12-07-2025
- Business
- Mint
Negotiators seek PMO's decisive word to clinch landmark US trade deal
New Delhi: India's commerce and industry ministry has sought guidance from the Prime Minister's Office on the trade-offs required for the final breakthrough in the trade pact with the US as the American demand for tariff cuts on farm products remains a sticky point, said two people aware of the matter. The negotiators have sought the PMO's intervention in finalising the first tranche of the India-US Bilateral Trade Agreement (BTA), as President Donald Trump has neither accepted nor rejected the deal even after approval by the United States Trade Representative, the people said, speaking on the condition of anonymity. While the initial working deadline was 8 July, the US has now extended the window until the end of the month in view of the complexity of the unresolved items and the evolving trade posture under the second Trump administration. He has already issued letters to 22 other countries, disclosing new reciprocal tariff rates of up to 50%. Concerns have been growing within the Indian team, led by chief negotiator Rajesh Agarwal, special secretary in the commerce ministry, over the US's continued insistence on deeper market access for its agricultural exports and other sensitive products. Citing the case of the European Free Trade Association (EFTA), the Indian team has explained in detail to their US counterparts about India's inability to open these sensitive sectors, a position that was accepted by Switzerland, Iceland, Liechtenstein, and Norway. India stays firm Around a dozen Indian negotiators, including commerce secretary-designate Agarwal and joint secretary Darpan Jain, will shortly leave for Washington DC to close the remaining gaps with their American counterparts. 'The team will be in Washington for a week to negotiate on the sticky issues. The guidance from the top office has been sought to get more clarity on key subjects like agriculture, dairy, and genetically modified crops," said the first of the two persons cited above. However, India has no plans to open up any sector that could affect a large section of the population, the person said. So far, both sides have held five rounds of face-to-face discussions. The US team, led by assistant USTR Brendan Lynch has visited India twice—first for a four-day trip starting 25 March, and more recently from 4 to 11 June. 'The US side is firm that any agreement must reflect genuine gains for its farmers and agri-exporters. From our side, we've already made considerable offers across pharmaceuticals, tariff rationalisation, and even on some non-tariff barriers," said the second person. 'But on agriculture, we need political direction on how far we can go without hurting domestic producers," this person added. Decisive round soon A high-level US trade delegation is expected to return to New Delhi in the third week of July for what commerce ministry officials describe as the likely 'decisive round" of negotiations. 'The last leg is always the hardest in any trade negotiation. There is broad agreement on digital trade, services, textiles, and industrial goods," the second person said. Mint reported on 7 July that the agreement is unlikely to be finalized without direct political intervention to resolve some of the remaining sticky issues. As India continues its engagement, the persons quoted earlier maintain that the final decision will be guided by national interest, balancing trade gains with domestic sensitivities. The PMO's input, expected later this week, is likely to shape the contours of India's final position heading into the concluding round of talks, they said. Queries sent to the commerce ministry and PMO remained unanswered at the time of filing this report. 'Seeking guidance from the PMO at this stage signals the strategic weight of the India-US trade deal," said Vinod Kumar, president, India SME Forum. 'With sensitive issues like agriculture still unresolved, the government wants to ensure that any final commitments align with broader national priorities and political acceptability." Meanwhile, Union agriculture minister Shivraj Singh Chouhan said on 7 July that a trade deal with the US would be signed, keeping the interest of Indian farmers at the forefront. According to commerce ministry data, Indian goods exports to the US rose 11.6% over the previous year to $86.51 billion in FY25. By comparison, imports from the US rose 7.42% to $45.33 billion. Trump in April imposed a 26% tariff on Indian exports to the US. But before these were implemented, the US president announced a three-month pause that ended on 9 July. However, earlier this month, Trump extended the deadline to implement the tariffs to 1 August and issued letters of revised tariff rates to 22 countries (till 9 July). Brazil faced the highest at 50%, while Laos and Myanmar were each slapped with a 40% tariff.
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Business Standard
05-07-2025
- Business
- Business Standard
India-US trade deal awaits Trump's nod ahead of July 9 tariff deadline
The first stage of the India-US Bilateral Trade Agreement (BTA) is now ready and awaiting final approval from US President Donald Trump, according to a LiveMint report quoting sources. The interim deal has been cleared by US Trade Representative (USTR) Jamieson Greer and could be signed as early as July 8 -- a day before Trump's reciprocal tariff deadline. The development comes after Indian negotiators, led by chief negotiator Rajesh Aggarwal, extended their stay in Washington beyond their initial schedule to bridge gaps over sensitive sectors, particularly agriculture. A key government official told LiveMint, 'Indian negotiators did their best to convince their US counterparts about the domestic sensitivities involved in these sectors. To some extent, the USTR has agreed to India's position on not fully opening up the agriculture sector. Now, it's up to the US President to take the final call.' Agriculture, dairy, genetically modified (GM) seeds, and medical services remain points of contention, with the US seeking greater market access while India looks to protect its vulnerable sectors, as per the report. India-US trade deal: Options on tariffs The US, as per the report, has offered two alternatives on tariff reductions. If India agrees to the US's demands in agriculture and related sectors, its exports could face an additional 10 per cent tariff. 'If India agrees to US demands for greater market access in agricultural goods, dairy and seeds, then Indian goods may face only a 10 per cent additional tariff -- which, while not ideal, is still much lower than what other countries in the Asian region are facing,' a person aware of the talks told LiveMint. If India refuses, tariffs could go up to 20 per cent, which includes the existing 10 per cent baseline and an extra 10 per cent under earlier US measures. Still, this would represent a 6 per cent relief from the earlier proposed 26 per cent duty. Trump's deadline nears The US President, speaking to reporters on July 4, confirmed he had signed multiple letters informing countries of upcoming reciprocal tariffs. 'I signed some letters and they'll go out on Monday, probably 12. Different amounts of money, different rates of tariff,' Trump said, without naming the countries. Although the reciprocal tariffs are scheduled to take effect from August 1, the letters are expected to be sent out on July 8, giving India a narrow window to seal the deal before being hit by new duties. India firm on agriculture, open on other fronts India is pushing for better access for its leather, textiles, and footwear sectors, while resisting demands to lift restrictions on GM seeds and crops. Only Bt cotton is currently approved for cultivation in India, and no GM food crops are commercially grown. US-India trade data Commerce ministry figures highlight the growing trade with the US. In FY25, India's exports to the US rose by 11.6 per cent to $86.51 billion, while imports increased by 7.42 per cent to $45.33 billion. However, US imports fell in May year-on-year, from $3.85 billion to $3.63 billion, while exports grew by 17.3 per cent, led by electronics and smartphones. In contrast, India's imports from China rose by 11.5 per cent in FY25 to $113.46 billion, while exports to China fell by 14.5 per cent, underscoring the trade imbalance. The deal, if finalised, is likely to mirror elements from recent US trade agreements with the UK and Vietnam. While the US retained its 10 per cent baseline tariff in both those cases, it offered some reductions in additional duties. Trade watchers see the India-US agreement as a limited deal focused solely on goods, with services and labour excluded for now. Despite the challenges, negotiators on both sides remain hopeful of concluding an agreement in time to avoid penalties. The ball now lies in Trump's court.
Mint
05-07-2025
- Business
- Mint
The India-US trade deal is on Trump's desk. Will he sign?
The first tranche of the India-US Bilateral Trade Agreement (BTA) is now awaiting US President Donald Trump's final approval, after being greenlit by US Trade Representative Jamieson Greer, three people directly involved in the process told Mint on the condition of anonymity. The key sticking points remain the same as reported by Mint on 11 June. 'The final stretch of India-US trade talks has centred around sensitive sectors such as dairy, agriculture, digital, genetically modified (GM) seeds and medical services, with Washington pushing for greater access while New Delhi is seeking a balanced agreement that safeguards its vital sectors," said the first of the three people cited above. With the US pause on reciprocal tariffs set to end on 9 July and the Trump administration shifting its stance from mutual tariff reduction to seeking greater market access, Indian negotiators are burning the midnight oil to secure a 'respectable deal," the person added. The Indian team extended its stay in Washington beyond the originally scheduled two-day visit that ended on 27 June, in a final effort to resolve differences, particularly over agriculture, and to conclude negotiations for an interim trade agreement. According to the second person, the US has proposed two alternative options for tariff reduction in case White House does not 'fully agree" with the terms finalized by Indian negotiators and their American counterparts. 'If India agrees to US demands for greater market access in agricultural goods, dairy and seeds, then Indian goods may face only a 10% additional tariff—which, while not ideal, is still much lower than what other countries in the Asian region are facing," said the second person. 'And in case India does not agree, it could face a 20% tariff—comprising the existing 10% baseline duty and a 10% reciprocal tariff carved out of the 16% additional duty imposed on 2 April as part of the US's Liberation Day action," the person added. In that scenario, India would still gain a 6% relief. The recently concluded in-person round of talks is seen as critical, especially since the US has already finalized trade deals with China, Vietnam and the UK. Although talks with China began after India's, they progressed more quickly and helped ease bilateral tensions. Indian negotiators are seeking the elimination of reciprocal tariffs and additional duties such as those on steel, aluminium, and auto components—along with assurances that no future tariffs will be imposed. 'Indian negotiators did their best to convince their US counterparts about the domestic sensitivities involved in these sectors. To some extent, the USTR has agreed to India's position on not fully opening up the agriculture sector. Now, it's up to the US President to take the final call," said the third person aware of the discussions. However, this person expressed confidence that the deal is on track and likely to be announced by Trump before 8 July in the US. The pact is likely to follow the US model adopted in its agreements with the UK and, more recently, with Vietnam, according to trade experts. 'Nothing would be better than the US removing the 10% baseline duty from Indian goods, but India should not open its critical sectors just to get that 10% duty removed," said Ajay Srivastava, co-founder of the Global Trade Research Initiative (GTRI), a think tank. 'India should aggressively plan to diversify its exports to other countries and minimise its dependency on the US. There may be a knee-jerk impact in the initial stage, but in the long run, it will help build resilience and strengthen India's global trade position," he added. In its trade deal with the UK, the US did not remove the 10% baseline duty that applies to all countries. In Vietnam's case, the total tariff was lowered from 46% to 20%, including the 10% baseline duty imposed under the Trump administration's reciprocal tariff framework. The US-Vietnam deal also introduced a 40% tariff on transhipments through Vietnam, aimed at curbing Chinese goods being routed to the US using Vietnamese facilities. 'Trade agreements aim to eliminate trade barriers and to set rules that support high-standard, seamless trade that creates certainty for businesses. To that definition, none will be done with the US by 9 July. At best, there may be frameworks for future negotiations. There are too many issues to resolve with too many parties," said Steven Okun, CEO, APAC Advisors, a Singapore-based consultancy firm. As of now, tariffs on Indian exports to the US (26%) are lower compared to those on Vietnam (46%), Cambodia (49%), Bangladesh (37%) and Thailand (36%), offering India a strategic tariff advantage in sectors such as electronics, apparel, and toys. In the case of China, tariffs on Chinese goods had previously surged as high as 145%, but following a truce in Geneva, they were brought down to 30%. Under the new agreement, however, these have now been restructured into a flat 55% rate—significantly higher than the tariff levels currently applied to Indian goods. Queries sent to the Indian commerce ministry, spokespersons of the USTR, and the US Embassy in New Delhi remained unanswered till press time. In the meantime, Indian exporters have been benefiting from steeper US tariffs on Chinese goods, which gave Indian products a competitive edge. China's exports to the US plummeted 34.5% year-on-year to $28.8 billion in May from $44 billion a year earlier, according to data released by China's General Administration of Customs on 10 June. This, however, was offset by China's rising exports to members of the Association of Southeast Asian Nations (up 15% year-on-year to $58.4 billion in May), and the European Union (up 12% to $49.5 billion According to data released by India's commerce ministry on 16 June, India's imports from China rose 21.7% to $10.32 billion in May from $8.48 billion a year earlier, driven by higher inflows of electronic goods, machinery, chemicals, and project-related equipment. Meanwhile, India's imports from the US declined to $3.63 billion in May from $3.85 billion a year ago, while exports to the country grew 17.3% year-on-year to $8.8 billion, led by higher shipments of smartphones and electronics. According to commerce ministry data, Indian goods exports to the US in the last financial year (FY25) increased by 11.6%, from $77.52 billion in FY24 to $86.51 billion in FY25. Imports from the US also rose, but by a smaller margin of 7.42%, increasing from $42.20 billion to $45.33 billion during the fiscal year that ended on 31 March. Meanwhile, imports of goods from China rose by 11.5%, from $101.74 billion in FY24 to $113.46 billion in FY25, while exports to China decreased by 14.5%, from $16.67 billion in FY24 to $14.25 billion in FY25, the data showed.
