India expects 'preferential' tariffs in a trade deal with U.S., says India's commerce minister

CNBC

a day ago

India expects to secure "preferential" tariffs from the United States that are better than those achieved by its economic rivals, according to India's commerce and industry minister Piyush Goyal. Goyal, who led the negotiations on the U.K.-India trade agreement, signaled a confident approach from New Delhi in ongoing trade talks with Washington. "India will get a preferential tariff compared to our peers and our competitors, because we were amongst the first to get into negotiations and our discussions, our engagement is truly very, very significant," Goyal told CNBC on Thursday. His comments were in response to a question about whether India could hope for better terms than the tariffs currently faced by Japan and Vietnam on some of their U.S. imports. Their exports face 15% and 20% duties, respectively. The minister said the negotiations were "progressing extremely well" towards a deal aimed at achieving the $500 billion bilateral trade target by 2030 , a goal previously set by Indian Prime Minister Narendra Modi. "I have excellent relations with my good friend, [U.S.] Commerce Secretary, Mr Howard Lutnick," Goyal said. "The United States and India share a very special relationship, and I'm very confident we'll do a robust and good deal where both countries benefit and where businesses on both sides are happy." Lutnick is leading the U.S. trade negotiating team. The optimism was echoed by business leaders, who predicted that while a deal would be reached, India would negotiate from a position of strength. Keshav Murugesh, chairman of the Confederation of Indian Industry UK Business Forum, told CNBC that Indian negotiators would handle talks "strictly on merits" and "India will not be a pushover." Murugesh, also the chief executive of business services firm WNS , suggested that both sides are sufficiently motivated, noting that President Trump "and his people want a good deal with India because, let's face it, India is the future." India's Goyal also said the push for a U.S. deal is part of a deliberate policy to partner with "developed nations who complement the India story," a move away from past agreements with countries seen as direct competitors. He cited India's decision to withdraw from the Regional Comprehensive Economic Partnership (RCEP) as an example of this, describing the pact as something that "would have otherwise been like a China-India FTA." His comments came on the day India and the United Kingdom finalized their free trade agreement. The bilateral deal, first announced in May , will see the U.K. benefit from lower tariffs on key exports such as whisky and cars, which will kick in over several years. Meanwhile, India will gain tariff-free access on 99% of imports from day one of the agreement. While expressing confidence in the U.S. talks, Goyal acknowledged sensitive issues remain. When asked if agriculture was a sticking point , he declined to comment specifically on the trade discussions but added that the sector was sensitive to India. "We are always very sensitive to the interests of our farmers, the interests of our MSMEs, and will ensure that our areas of concern are well protected," Goyal added. The issue is critical for Modi's government, as the vast agricultural sector employs a huge portion of India's population and represents a powerful political constituency. Protecting farmers from foreign competition is a long-standing government priority. Goyal added that the U.S. side understood India's position, saying, "the Trump administration, and my counterparts are equally cognizant and sensitive about our concerns." — CNBC's George Bextor contributed reporting.