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Business Standard
06-07-2025
- Business
- Business Standard
India-US BTA negotiations throw up tricky farm trade riddles to solve
Any decision on granting access to maize from the US may send the ruling JD(U)-BJP-led coalition back to the drawing board in poll-bound Bihar, writes Sanjeeb Mukherjee Sanjeeb Mukherjee Delhi Listen to This Article As the India-United States (US) Bilateral Trade Agreement (BTA) negotiations enter a crucial phase, the fate of three key agricultural commodities — maize, soybean, and soyoil — would be keenly watched. According to sources, the US boasts of huge surpluses of all three commodities and is pushing to ease entry barriers as part of the deal. If the US has its way, it could have repercussions for farmers in Madhya Pradesh, Maharashtra, Telangana, and Andhra Pradesh. But, the most immediate impact could be in Bihar, which goes to polls later this year.
Indian Express
04-07-2025
- Business
- Indian Express
Vietnam trade pact has multiple takeaways, a clear China red-flag, and some pointers for the impending India-US deal
As the India-United States trade deal looks set to be announced over the next few days, a new deal inked by the Donald Trump administration with Vietnam offers fresh pointers for how Washington DC is approaching these trade agreements. One, the Vietnam deal shows that Trump is serious about tariffs, and that any belief that his administration plans to put off the tariff threats might be misplaced. The US Vietnam deal is clearly lopsided against the smaller, developing country, given that the US will impose a 20% tariff on Vietnamese goods entering the country while Vietnam has been arm twisted to drop all tariffs on American goods. For other countries too, including smaller nations, there is a strong likelihood of the deals being completely lopsided in favour of the US. Also, while the 20% rate is lower than the original proposal of 46% tariff on Vietnam, this rate is certainly higher than the 10% that was levied when the reciprocal tariffs were withdrawn. But there is a really big catch in the deal fineprint. Two, the catch in this deal is that any goods that are transshipped through Vietnam to the US will face a double tariff of 40%. That is a move clearly aimed at one country only — China. A lot of Chinese components make their way to Vietnam and are integrated into goods that the South-East Asian country eventually ships to the US, and the rest of the world. For instance, Chinese fabrics are used in Vietnamese clothing, given that the latter does not really have a cotton or man-made fibre production base. Chinese components go into electronics that are assembled in Vietnam and sent abroad. A higher tariff rate on goods that are made and assembled in Vietnam, but include foreign components, is clearly a move aimed at targeting Chinese producers and potentially make them less competitive while using production bases such as Vietnam. Now, that is a template, which could be followed for other ASEAN countries that are increasingly being regarded by Washington DC as transshipment hubs for China. The broader message from this is perhaps that the Trump administration could continue to act tough on China. In both respects, this could be good news for countries such as India if they are able to wrangle better terms in their deals with the US. Vietnam is a competitor for India, and benefits greatly from the China alliance. Third, the Vietnam deal shows that the pact seems to be centered on headline tariffs, even as they do not seem to really address the sectoral tariffs, which has been a key sticking point for countries such as Japan and South Korea, who were earlier seen as frontrunners to clinch early deals. Sectoral tariffs are an issue for India too. What the Vietnam deal likely shows is that there is still going to be a lot of fog even after a deal is clinched, especially with Asian countries that generally have multiple tariff lines and an array of tariffs. Fourth, the big takeaway from this deal is that the tariff onslaught initiated by the US is likely to continue focusing on China. With the July 9 deadline looming, which is just three-working days away, there are indications the about 20-odd countries that are in active talks with the Trump administration are eventually going to land up in three main buckets — the ones like possibly India, Taiwan and the European Union, which are likely to get a deal, just like the UK and Vietnam. Others might get more time to negotiate, maybe another three months or so. Then there's going to be the third grouping of countries that are just going to get handed their tariff rate without any negotiation whatsoever. Canada and Mexico are outside of these three categories, since the reciprocal tariffs were not slapped on them in the first place. Meanwhile, the last word on the validity of the reciprocal tariffs is likely to come from the judiciary, since the matter is being heard in American courts. There are some implicit assumptions that New Delhi seems to be working with in its approach to a deal with Washington DC. Despite President Trump's vacillations on trade policy, there is confidence here that the administration in Washington DC will maintain a steady differential in tariffs between China and countries such as India. Precisely for that gap to be maintained, a deal, officials said, needs to be clinched by India. The Vietnam deal is being seen as a vindication of this view. Also, while agriculture is a concern, as is the perceived arm twisting by the Trump administration on issues that are sensitive from an Indian point of view, there is a growing sense within an influential section of policymakers here that a deal for New Delhi is vital to keep the differential with China in place, especially since Beijing is also trying to strike a deal of its own. The question really is whether the Indian negotiators would have to settle for a limited early-harvest type of mini deal, or would they have to turn away from the negotiating table for now, let the July 9 deadline pass, and then rebuild efforts to bridge the gaps. A full-scale deal looks out of the question for now. Second, there is now a realisation that cutting tariffs across segments, especially intermediate goods, might be a net positive for India. Also, while the redlines for India would include sensitive sectors such as dairy products and cereals, where agri livelihoods are at stake, there is now greater receptiveness within India's policy circles to cut tariffs on some industrial goods, including automobiles, and some agri products of interest to the Amercians. Also, India has headroom to import more from the US, especially in three sectors — crude, defence equipment and nuclear, to manage Trump's constant references to the trade gap. Third, there is a growing view that the baseline tariffs are here to stay. So, effectively, what India would be negotiating for is a rate between 10% and 26 %. Prior to Trump's taking over in January, the effective duty on India was just 4%, and there were virtually no non-tariff barriers. That number is now a thing of the past. What is more consequential is the effective duty on Chinese products on a landed basis across US ports in commodity categories where Indian producers are reasonably competitive. The net tariff differential with India, and how that curve continues to move, is of particular interest here, given the firm belief in policy circles here that Washington DC would ensure a reasonable tariff differential between China and India. This is, in turn, expected to tide over some of India's structural downsides — infrastructural bottlenecks, logistics woes, high interest cost, the cost of doing business, corruption, etc. Anil Sasi is National Business Editor with the Indian Express and writes on business and finance issues. He has worked with The Hindu Business Line and Business Standard and is an alumnus of Delhi University. ... Read More
Hans India
03-07-2025
- Business
- Hans India
Cloud of uncertainty over Indo-US BTA seems to be lifting
After weeks of uncertainty and doubts over the US-India trade deal, it seems like it may finally be signed shortly. It may be recalled that the 90-day pause for the tariffs that US President Donald Trump imposed nears its end. He announced the pause on April 9. Washington imposed a 26 per cent tariff rate on Indian made goods. External Affairs Minister S. Jaishankar is quoted as saying, 'We are in the middle—more than the middle—of a trade negotiation. I hope to bring it to a conclusion, but I can't guarantee it as there is another party involved.' He hinted that this could be done 'over the next few days.' Incidentally, the US has corroborated this. Saying that Trump shares a 'very good relationship' with Prime Minister Narendra Modi, the White House press secretary Karoline Leavitt confirmed this much during a press briefing: 'Yes, the President said that last week [that the US and India are very close to a trade deal], and it remains true. I just spoke to our Secretary of Commerce about it. He was in the Oval Office with the President. They are finalising these agreements, and you'll hear from the President and his trade team very soon when it comes to India.' Hopefully, the optimism expressed by Delhi and Washington materialises. For, quite apart from the knotty bilateral issues, there is the matter of Trump taking credit for stopping the hostilities between India and Pakistan in May. The Indian government didn't like that; this also apparently resulted in the hardened stance by our negotiators. Besides, many Sangh Parivar-affiliated bodies like the Bharatiya Kisan Sangh (BKS) and Swadeshi Jagran Manch (SJM) were opposed to certain aspects of the India-United States bilateral trade agreement (BTA). These aspects are related to genetically modified (GM) crops, dairy products, relaxed regulations on medical devices, and data localisation. It looks like the government, while addressing the genuine concerns of the BKS-SJM types, has ignored their ideologically motivated demands. This is quite appropriate for policy formulation. The proposed US-India BTA holds significant potential to transform the economic and strategic landscape between the two nations. Beyond the immediate goal of boosting bilateral trade volumes, the BTA can catalyse deepening economic integration and fostering long-term cooperation in key sectors. Increased market access and reduced trade barriers under the agreement would likely encourage higher US investments in India, particularly in areas like manufacturing, infrastructure, energy and services. Furthermore, the BTA could facilitate the transfer of advanced technologies, especially in critical domains like defence, information technology, renewable energy, and pharmaceuticals. This technology sharing would not only strengthen India's domestic capabilities but also enhance its global competitiveness. Small and medium-sized enterprises (SMEs) in both countries could particularly benefit from easier market entry and reduced regulatory hurdles, thereby promoting inclusive economic growth. On a strategic level, the BTA can consolidate the growing US-India partnership, which is increasingly seen as vital for maintaining balance and stability in the Indo-Pacific region. Moreover, enhanced economic ties will complement the existing defence and security cooperation, reinforcing the shared commitment to a free, open, and rules-based international order. Ultimately, the BTA has the potential to evolve from a mere trade pact into a cornerstone of a robust, multifaceted US-India alliance that spans commerce, technology, investment, and geopolitics.
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Business Standard
30-06-2025
- Business
- Business Standard
India-US BTA: Sangh affiliates draw red line over GM crops, dairy products
Affiliates of the Sangh Parivar have said the India-United States bilateral trade agreement (BTA) is unlikely to happen if America continues to be 'stubborn' about securing market access for genetically modified (GM) crops, dairy products, relaxed regulations on medical devices, and data localisation. The Bharatiya Kisan Sangh (BKS) and Swadeshi Jagran Manch (SJM) have flagged the issue that concessions to the United States (US) in the agriculture sector, including dairy products, will have ramifications for the country's food security. The parivar has pointed to the efforts by US Senator Lindsey Graham to move a Bill that envisages steep economic penalties for India, and also China, for importing Russian oil. The Bill could propose a 500 per cent tariff on imports from countries not supporting Ukraine. On Monday, SJM National Co-Convenor Ashwani Mahajan posted on X: 'No matter what US President Donald Trump says, there cannot be a trade deal with the US because India cannot give what America is asking for.' Mahajan said India could not possibly give ground on market access to America's genetically modified crops and other agricultural products. 'How can the country's agriculture and small industries be sacrificed in front of America's stubbornness,' Mahajan said. India cannot allow 'non-vegetarian milk and dairy', he said, adding that there could not be any agreement that compromised the interests of India's farmers and dairy. Talking to Business Standard, Mahajan said the SJM had opposed the Regional Comprehensive Economic Partnership (RCEP) because it would have compromised the interests of India's farmers. 'India's farmers will be unable to compete with the US, given the subsidies that the latter provides its farmers. What if India's farmers stop producing?' Mahajan asked. Earlier this month, the BKS had slammed the NITI Aayog for its working paper that recommended increasing agricultural trade between India and the US. The BKS accused the Aayog of 'kneeling in the tariff war with the US'. In a post on X on Sunday, Jairam Ramesh, Congress general secretary in charge communications, wondered why the NITI Aayog working paper, titled 'Promoting India-US Agricultural Trade Under the New US Trade Regime', and issued on May 30, was withdrawn. 'It got reported and also invited some critical comments. Now the Working Paper has gone missing from the Aayog's website. It has reportedly been withdrawn. Wonder why?' he asked. The paper has been taken off the Aayog's website since June 23. Some farmer groups such the Bharatiya Kisan Union (Apolitical) said it was because of them and other peasant organisations. In a statement, BKS All India General Secretary Mohini Mohan Mishra said the working paper had recommended that India, under the proposed BTA, open up its market for rice, pepper, soybean oil, shrimp, tea, coffee, dairy products, poultry, apples, almonds, pistachios, corn, and GM soy products. Mishra said that doing so could risk the livelihoods of 700 million Indians dependent on agriculture. 'When the government is preparing to make the country self-reliant in oilseeds, then reducing the import duty on edible oil is a contradictory decision in itself,' Mishra said. Mishra said the advisors to the NITI Aayog should reconsider their recommendations. 'It is well known that in the US, GM soya and maize are used as animal feed and some amount of ethanol is produced from them. In such a situation, why is it suggested that the crop be imported?' he asked. The BKS leader said the government had formulated a policy to add 20 per cent ethanol to petrol and had already added 18.5 per cent ethanol. 'In such a situation, the suggestion to import American GM corn shows a conflict with the interests of farmers. Such unethical suggestions of the Ayog should be corrected immediately,' Mishra said, adding that the think tank bowing under pressure was not good for India. If the Aayog does not have faith in the country's capabilities, the government needs to review its working system, he said.
India Gazette
06-06-2025
- Business
- India Gazette
"India-US bilateral trade agreement negotiations resume in Delhi"
Brescia [Italy], June 5 (ANI): The next round of negotiations for the India-United States Bilateral Trade Agreement commenced in Delhi, with US trade team officials in the capital engaging in crucial discussions aimed at strengthening economic ties between the two nations. In an exclusive interview with ANI, Commerce and Industry Minister Piyush Goyal confirmed that US trade team officials have reached India, with additional team members expected to arrive soon to participate in the negotiations. The talks come against the backdrop of recent statements by Goyal in Paris on June 1, where he outlined that India and the United States are working toward providing preferential market access to their respective businesses. Teams from both nations are actively collaborating on the proposed bilateral trade agreement framework. When asked about US President Donald Trump's announcement to increase tariffs on steel and aluminium to 50 percent, Goyal indicated that both countries remain committed to addressing trade issues through bilateral dialogue. 'Let us wait and watch... both the US and India share good relations and we will continue to work together to resolve all these issues bilaterally,' Goyal said. The current negotiations build upon commitments made in February, when US President Donald Trump and Prime Minister Narendra Modi announced plans to negotiate the initial phase of a comprehensive, multi-sector Bilateral Trade Agreement. The timeline targets completion by fall 2025. The proposed agreement is ambitious in scope, seeking to dramatically expand bilateral trade from the current $191 billion to $500 billion by 2030. This represents more than a doubling of trade volumes between the world's largest democracy and its most powerful economy. The negotiations in Delhi mark a significant step forward in what both nations view as a strategic economic partnership, with potential implications for global trade patterns and supply chain configurations in key sectors including technology, pharmaceuticals, defence, and agriculture. (ANI)
