India-US Bilateral Trade Agreement (BTA) Negotiations
India is seeking an assurance from the United States that no additional tariffs will be imposed once the Bilateral Trade Agreement (BTA) is finalized.
Key Concerns and Requirements
- Stability in Tariffs: India wants assurance that tariffs once agreed upon will remain unchanged.
- Concessions for Labour-Intensive Sectors: India has requested concessions for sectors such as leather and textiles.
- Renegotiation Clauses: India seeks a mechanism to renegotiate or receive compensation if tariffs are increased.
Issues with Current US Tariffs
- 26% Reciprocal Tariff: Announced on April 2, paused for 90 days until July 9, but the baseline tariff of 10% remains.
- Impact of Tariffs on Steel, Aluminium, and Auto: India is monitoring the effect of 50% tariffs on these sectors.
Negotiation Strategies
- Preferential Trade Advantages: India has left it to the US to decide how to reduce its tariff barriers.
- Clawback Provision: India must be able to withdraw benefits if the US raises tariffs or reneges on commitments.
Progress and Future Goals
- Early Harvest Deal: Discussions are ongoing to conclude an initial agreement by July 9.
- Trade Expansion Goal: Both nations aim to expand bilateral trade to $500 billion by 2030.
Cautions and Expert Opinions
- Incomplete Trade Deals: Caution is advised due to the US's history with deals like the Trans-Pacific Partnership.
- Uncertain Commitments: The future of the Indo-Pacific Economic Framework remains uncertain.
