India usa trade deal: The long -running bilateral trade talks between India and the US have now reached a decisive turn. While the US wants India to give concession in import duty on dairy and agricultural products. At the same time, India has refused to do so. All this is happening at a time when both countries are trying to finalize an interim trade agreement. This agreement can later be the basis of a comprehensive bilateral trade agreement (BTA). The dialogue has been going on in Washington since the end of June and is now the sixth day, but no concrete consent has been announced yet.
India told the dairy sector ‘red line’
According to the top sources of the Government of India, India has dismissed the demand for giving discount in tariffs on dairy products by the US. More than 8 crore people get employment in India from this region, most of which are small farmers. A senior official said bluntly, “There is no question of giving any concession on dairy. This is our red line.” The government believes that exemption in sensitive areas like agriculture and dairy can be disastrous for India’s rural economy.
Rajesh Aggarwal’s journey increased, Jaishankar also gathered in efforts
Rajesh Aggarwal, Special Secretary, Ministry of Commerce, who is leading the Indian delegation, has extended his journey in Washington one more day with the aim of removing the deadlock. The talks started from 26 June and now have entered the sixth day on Tuesday. The talks are likely to continue on Wednesday.
Meanwhile, External Affairs Minister S.K. Jaishankar is also in the US and is about to meet his American counterpart Marco Rubio during a diplomatic meeting. This meeting is also considered important towards breaking the deadlock in business talks.
India’s priorities- tariff concession in labor-dominated areas
There is a demand from India that the US should give exemption in import duty on labor-dominated areas such as textiles, costumes, gems and leather, plastic, chemicals, shrimp, oilseeds, grapes and bananas. According to government sources, “The concession on these products is not a threat to the domestic interests of America, so the possibility of opposition is also very low.” India believes that exemption in these areas will provide relief to its exporters and domestic employment will also be encouraged. The purpose of this interim agreement is to eliminate heavy duty (up to 26%) on Indian exports. The US wants to fulfill this agreement before the deadline of July 9.
Tariff Deadline and American Pressure
If the dialogue fails, the US can again apply tariffs up to 26%. According to PTI, an official said, “If the business talks fail, the 26 percent fee will be again impact.” The mutual fees imposed on Indian products on April 2 were suspended for 90 days. But the original tariff of 10% is still applicable. India wants permanent exemption from these additional charges so that exports do not be interrupted.
America’s demands and India’s challenge
America is demanding concession on dairy and agricultural products from India. These include industrial items, electric vehicles, wine, petrochemical products, apples, dry fruits (tree nuts), and gene-reflected crops. But it is difficult for India to accept all this, because most farmers of the country are dependent on traditional and marginal farming and any kind of external competition will directly affect them.
A target of $ 500 billion by 2030
India and the US want to finalize the first phase of their proposed bilateral trade agreement (BTA) by September-October this year. Its goal is to reach bilateral trade by 2030 to $ 500 billion. Currently, this trade is around $ 191 billion.
However, if there is no compromise on disputed topics like agriculture and dairy, then this goal can be difficult. India says that it will not accept any foreign pressure at the cost of its farmers and rural economy.