India, US to start in-person sectoral trade talks in May
New Delhi, April 30 -- The commerce ministry said on Tuesday that India and the US are looking at "early mutual wins" indicating that the two may work towards an early harvest deal even before they finalise the first tranche of their proposed bilateral trade agreement (BTA). People familiar with the matter said that India and the US will hold in-person sectoral trade engagements from the end of May.
An early deal will potentially avert additional US tariffs set to trigger on July 9, these people added, speaking of discussions after trade negotiators from India held crucial meetings last week.
"While productive sectoral expert level engagements have taken place through the virtual format, in-person sectoral engagements are planned from end May," the ministry said in a statement, following the negotiating team's recent visit to Washington.
During the three-day meeting in Washington from April 23-25, trade representatives had "fruitful discussions on wide ranging subjects covering tariff and non-tariff matters," the government said. The Indian delegation was led by chief negotiator Rajesh Agrawal.
The ministry also hinted at the possibility of early agreements, noting that "the team discussed the pathway for concluding the first tranche of the mutually beneficial, multi-sector Bilateral Trade Agreement by Fall of 2025, including through opportunities for early mutual wins." However, the statement did not explicitly state whether these "early mutual wins" would help avert the additional US tariffs after the 90-day pause period ends on July 8.
According to people familiar with the discussions, both countries want a mutually beneficial deal "sooner than later" so that Washington can showcase it to the world and New Delhi can secure immediate tariff concessions in one of its largest export markets. "The talks between the two countries have been fast-tracked. They finalised the pathways [terms of reference] for the BTA when the American negotiating team visited India in March. Thereafter, sectoral talks started through virtual mode, covering both tariff and non-tariff issues. The idea is to have an early harvest before concluding the first tranche of BTA by the fall of 2025," said one person who requested anonymity because they weren't authorised to speak publicly. The Washington meetings marked the second face-to-face engagement between negotiators from both sides. The first round of in-person talks took place in New Delhi from March 26-29, with Assistant US Trade Representative Brendan Lynch heading the American delegation.
On February 13, President Donald Trump and Prime Minister Narendra Modi announced their decision to forge a BTA and "plans to negotiate the first tranche of a mutually beneficial, multi-sector BTA" by autumn 2025. "While talks are progressing to conclude negotiations by September-October 2025 as envisaged by the leaders, there is a possibility of an early deal in the next two months," a second person said on condition of anonymity.
Two factors point to the likelihood of an early deal, according to the second person. First, US Treasury Secretary Scott Bessent recently expressed hope that America may sign its first trade deal with India while speaking about "very good proposals" from some countries to avert US tariffs. Second, there has been "positive progress" during the Indian negotiating team's recent visit to Washington. For the Trump administration, India's high tariffs remain a major concern. The US claims that India's average applied tariff is 17%, among the highest of the world's largest economies, compared to the US average applied tariff of 3.3%. India, meanwhile, has raised concerns about non-tariff issues such as technical barriers to trade and other regulatory obstacles.
Currently, India faces a 10% baseline tariff on its exports to the US, like all other countries, but an additional 26% "reciprocal" tariff has been paused for 90 days until July 8. The successful conclusion of an early harvest deal could potentially eliminate or reduce these additional duties....
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