‘Everything on the table…': India eyes duty cuts on both sides; seeks assurance Donald Trump-led US won't impose additional tariffs after trade deal

Time of India

4 hours ago

For India, a primary concern revolves around the process by which the US will reduce duties. (AI image)
India-US trade deal: With the Narendra Modi government and
Donald Trump
administration working to seal the first phase of the bilateral trade agreement at the earliest, India wants assurance that no further tariffs will be imposed.
On April 2, the US President Donald Trump declared a reciprocal 26% tariff on Indian goods imports as part of global trade measures. These tariffs were suspended for 90 days until July 9, whilst maintaining the 10% baseline tariff. Both nations are working towards finalising the BTA before the deadline expires.
Trade Deal: India Seeks Guarantee From US
India has sought guarantees from the US against future tariff impositions by the Trump administration following the completion of the bilateral trade agreement (BTA).
The negotiations are nearing completion, with both nations optimistic about swift resolution.
India has requested benefits for sectors requiring substantial workforce, particularly leather and textiles.
"We have put everything on the table," a source told ET, emphasising India's desire for tariff stability post-agreement. Standard trade agreements incorporate provisions for renegotiation or compensation when partners increase tariffs, and India aims to include similar safeguards.
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"This would ensure the agreement is ringfenced from prospective changes," another source stated.
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Trade specialists unanimously support the inclusion of such a provision. "The BTA should be timebound and not in perpetuity," a trade policy specialist said. "India must insist on a clawback provision — that it will withdraw benefits if the US raises tariffs or goes back on any of its commitments."
Government representatives indicated that the United States needs to devise a strategy for tariff reduction, as India has requested concessions for industries including textiles and leather.
Whilst the Trump administration presently needs US Congress approval to reduce duties below most favoured nation (MFN) rates, it possesses the authority to eliminate reciprocal tariffs.
"We want preferential and sustained trade advantages and have left it to the US to decide the route it takes to reduce its tariff barriers—whether through the Trade Promotion Authority or by seeking Congressional approval," an official said.
India's concerns on Trade Deal With US
For India, a primary concern revolves around the process by which the US will reduce duties, as the absence of US Fast Track Trade Authority could potentially delay the proposed trade agreement.
The US Fast Track Trade Authority serves as a specialised provision enabling the American President to negotiate trade agreements and submit them to Congress for a straightforward vote, without modifications or procedural holdups.
A government official indicated that the responsibility lies with US authorities to determine how to address their domestic regulations.
Officials said that both countries were examining a distinct combination of products under the proposed agreement, with India seeking reduced-duty access for its labour-intensive goods whilst offering concessions on American automobiles and select agricultural products. Both nations aim to finalise a bilateral trade agreement by September-October.
The administration is also assessing the consequences of the 50% duties on steel and aluminium, alongside the 25% duties on automobiles. Although the automotive parts industry anticipates minimal immediate effects, prolonged tariffs could potentially influence the sector. The official mentioned that India intends to seek concessions if they are granted to other nations.
India-US trade deal: Early deal on the cards?
The government, aiming to secure the first tranche of the bilateral trade agreement with the US before July 9, has said that it seeks "preferential and sustained advantage" through mutual duty reductions.
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"If trade has to be doubled to $500 billion, both sides have to reduce tariffs for better market access. It should be the endeavour of both countries to lower the tariffs. To what extent they have the legal authority to do so, that will depend upon their outlook towards trade," a senior official told TOI.
"We are working on the early tranche and as you are aware that there is a date (July 9), before that we would like to conclude this early tranche,' Commerce secretary Sunil Barthwa said.
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