Though the contours of the BTA are yet to be decided, officials said the global trade rules allow the deal to include an interim agreement followed by a larger deal or one with investment commitments.
India expects negotiations at the trade ministry-level to start in the next 10 days after the appointment of US trade representative (USTR).The ministry is also in talks with the revenue department to resolve any data discrepancy on tariffs before going to the negotiating table with Washington.
US President Donald Trump has termed India as a tariff abuser and threatened reciprocal tariffs on Indian goods imported into US.
“We are meeting different ministries, we are sensitising them. We have to understand their issues because if we have to do a BTA, all ministries will need to be on the same page. We will talk about reciprocal tariffs and India-US trade aspects,” said an official.
The ministry will hold talks with 3-4 ministries in the coming weeks.
The ministry is also discussing the possible tariff concessions to the US on a preferential basis, which would be specific to Washington as well as on the most favoured nation (MFN) basis where the concessions are offered to all trading partners.
“While India has a tariff differential, there is an understanding that we have to do an agreement,” the official said. The idea to reach out to all departments is to inform them about US executive orders.
“What will be there in BTA? What is the meaning of reciprocal tariffs? Any agreement we do, we involve all the ministries also,” the official said, adding that the nature of the proposed pact will be decided after bilateral meetings.
The Trump administration has appointed Wall Street billionaire Howard Lutnick as the new US commerce secretary but is yet to appoint USTR.
“After that, all negotiations with trade ministry level will start,” the official said.
India and the US aim to more than double the two-way trade to $500 billion by 2030 and negotiate the first tranche of a mutually beneficial, multi-sector BTA by fall of 2025.
America was India’s largest trading partner in FY24. The US is one of the few countries with which India has a trade surplus.
“In an era when the US wants to reduce trade deficit, the two sides are looking at $500 billion trade. BTA will provide a pathway for this aim…Their industrial goods exports to India and our labour-intensive exports to the US are positive (steps),” the official added.
During Trump’s first term, the two countries had discussed a mini-trade deal. As per the official, countries can do an interim agreement followed by a detailed agreement as per the World Trade Organization.
“One can do an interim or early harvest like Australia without substantial coverage and then commit to a final pact which covers substantial trade,” the official said.
Content Source: economictimes.indiatimes.com