Crime Today News
India is thrashing out an interim deal with the US on its reciprocal tariffs in the 90-day pause period announced by US President Donald Trump, while simultaneously commencing negotiations virtually this week to shortlist sectors and areas for a full-fledged India-US bilateral trade agreement (BTA). The parleys that begin this week to cover sectors and issues are expected to result in the first tranche of the BTA by September, this year.
“The US wants the BTA to include areas such as government procurement, IPR, digital trade, data localisation, and quality control. India, too, has its priorities such as liberal work visas and a social security agreement. Officials will now identify what is realistic and can be achieved by Fall 2025, the deadline set by Trump and PM Narendra Modi for the first tranche of the pact,” a source tracking the matter told businessline.
The two sides hope to have clarity on the coverage within six weeks, possibly by May 31, the source added.
India has not taken on serious commitments so far in its free trade pacts in many areas that interest the US, particularly government procurement, IPR and data localisation, as it has been reluctant to give up its sovereign right to take decisions in these crucial sectors.
On April 2, Trump announced reciprocal tariffs on US trade partners to punish them for their high tariffs. Analysts say that the reciprocal tariffs, fixed at 26 per cent for India and at higher levels for many other Asian countries such as Vietnam, Malaysia, Thailand and Cambodia, are also linked to the trade deficits that the US has with each.
On April 9, Trump announced a 90-day pause in tariffs as he said that about 75 countries were interested in doing a tariff deal with the US. Tariffs on China, fixed at 125 per cent, however, continued. Also, all countries, including India, continued to face an additional 10 per cent baseline tariff.
“India and the US are already engaged in BTA talks. It is not the same as negotiations on reciprocal tariffs. These two issues are parallel. At some point in time, they might get linked,” the source explained.
As part of a deal on reciprocal tariffs, the Trump regime is looking at steep tariff cuts in India for items such as automobiles, motorbikes, alcohol and certain agricultural items including fruits and nuts.
A deal on reciprocal tariffs is also important for India as its competitors, such as Vietnam and Indonesia, too, are also urgently trying to reach a pact with the US. The US is India’s largest export destination with exports in FY24 at $77.51 billion and imports at $42.19 billion.
On the negotiations for the BTA, which is expected to more than double bilateral trade to $500 billion by 2030, the source said the sectors and areas would be finalised at an appropriate time. “I think within May 31, we will have clarity on that. We will know what can be realistically achieved with the timeline of Fall 2025. What can’t be achieved in the first tranche, we will take up later,” the source said.
Published on April 13, 2025
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