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India and the US are negotiating a bilateral trade deal expected to be implemented in three phases.
While India hopes that a trade deal with the US will completely remove the 50 percent tariffs, it also took its case to the WTO on May 13, proposing retaliatory duties in response to the US tariffs on steel and aluminum.
India-US Trade Deal: The ongoing hesitance of the United States to provide India an exemption from the newly imposed 50 percent tariffs on steel and aluminum imports could significantly hinder the progress toward finalizing a “mini-trade deal” by the July 8 deadline, according to MoneyControl report. This will impact the first leg of a likely three-phase deal between India and US.
India and the US aim to conclude discussions for a preliminary Bilateral Trade Agreement (BTA) before the country-specific reciprocal tariffs, including a 16 percent levy on New Delhi, become effective on July 9.
Higher Tariffs Impact Negotiations
“The decision to raise the steel and aluminum duty from 25 percent to 50 percent is likely to delay the deal, particularly since the US is not yet ready to offer a complete exemption. There is also uncertainty about the 10 percent baseline tariff,” a person told MoneyControl.
Baseline Tariffs Remain
In addition to the country-specific tariffs postponed until July 8, the US has also imposed a 10 percent baseline tariff on all imports, which continues to be in effect.
Securing an exemption from these increased tariffs is crucial since India exported $4.56 billion worth of iron, steel, and aluminum products to the US in FY25.
India’s Response to Tariffs
While India hopes that a trade deal with the US will completely remove the 50 percent tariffs, it also took its case to the WTO on May 13, proposing retaliatory duties in response to the US tariffs on steel and aluminum. However, the US not only rejected India’s notice at the WTO but also doubled the tariffs to 50 percent for all countries starting June 09.
India had initially approached the WTO against the earlier 25 percent tariffs.
India-US Trade Negotiations
India and the US are negotiating a bilateral trade deal expected to be implemented in three phases. According to a Bloomberg report, the goal is to finalize this agreement before the new tariffs come into effect.
The deal may include enhanced access for industrial goods and some agricultural products, as well as efforts to reduce other trade barriers, such as strict quality control measures. Officials, who shared this information with Bloomberg on the condition of anonymity, noted that the discussions are ongoing and it is not yet clear if the US has agreed to the proposed three-phase deal.
The final phase of the agreement would be a comprehensive deal requiring approval from the US Congress, with officials indicating that this stage might only be finalized next year, as per Bloomberg’s report.
India was one of the first countries to initiate trade talks with the US following Prime Minister Modi’s visit to the White House in February, shortly after President Trump took office. Both leaders committed to strengthening trade relations and aimed to complete the first phase of the deal by fall. Since then, India has been keen on achieving some early trade benefits before the set deadline.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
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