The first phase of the bilateral trade agreement between India and the United States has been finalized and is currently undergoing legal drafting, Union Commerce and Industry Minister Piyush Goyal announced recently. He clarified that the deal's operationalization hinges on India securing a comparable or competitive tariff advantage against other nations.
Goyal emphasized that these remarks were consistent with his previous statements, indicating a steady progression in the negotiations. Later, Commerce Secretary Rajesh Agarwal echoed this sentiment, stating that both nations were close to concluding the first tranche of the deal and that discussions were moving in a positive direction.
Tariff Structure and Section 301 Investigations Crucial
Agarwal, however, underscored critical conditions for the deal's finalization. He stated that the tariff structure must be settled, and there needs to be clarity regarding the outcome of the US Section 301 investigations. These investigations often involve trade actions against countries deemed to engage in unfair trade practices.
"A trade deal has a very important component—not only market access, but also preferential market access relative to competitors," Agarwal noted, highlighting India's focus on gaining a strategic edge.
India has also joined a US-led initiative aimed at addressing structural overcapacity in manufacturing, an issue discussed at the G20. Agarwal indicated that excess capacity resulting from non-market practices could distort global markets and impede fair trade.
Parallel Trade Talks with Canada
In related developments, India is also optimistic about concluding its trade negotiations with Canada by the end of the year. Officials report good progress, with the next round of talks scheduled for early November in Delhi. These negotiations encompass 16 policy areas, including market access for goods and services, rules of origin, trade remedies, and dispute settlement.
The Commerce Department has listed these ongoing trade deals with the US and Canada among nine other free trade agreement negotiations currently in progress.