50% US Tariff Casts Shadow Over India-US Bilateral Trade Agreement Talks

The sixth round of talks scheduled to finalise the outline of the proposed bilateral trade agreement (BTA) between India and the US has been postponed. Government sources said the American delegation was scheduled to come from August 25 to 29 to hold negotiations on the bilateral trade agreement.

The decision by the US trade delegation comes at a time when the deadline to implement US President Donald Trump's decision to impose 50 per cent tariffs on India will come into effect (on August 27).

Talks between Mr Trump and his Russian counterpart Vladimir Putin in Alaska have also yielded no concrete outcome.

Earlier, India and the US failed to reach an agreement on a mini trade deal. One of the main reasons was the US' demand for lower duties on agricultural and dairy products, which India declined.

India has made it clear that it cannot allow the import of genetically modified (GM) foods.

During his address from the Red Fort on the 79th Independence Day on August 15, Prime Minister Narendra Modi had said India's farmers, cattle-rearers and fishermen are the government's top priority.

"I stand as a wall against any harmful policy concerning them. India will never accept any compromise when it comes to the interests of farmers, cattle-rearers and fishermen," PM Modi said.

A senior Commerce Ministry official told NDTV US officials verbally expressed their inability to visit India, so both countries have decided to reschedule the sixth round of talks soon.

The India-US bilateral trade agreement began in March this year, with the aim of concluding its first phase by October-November this year. Several virtual meetings between the two sides have already taken place.

India is currently reviewing the implications of the recent developments. The Ministry of Commerce and Industry is consulting all stakeholders to assess their feedback, sources said.

India's major exports to the US include mobile phones, cut and polished gemstones, textiles, and pharmaceutical products. The imposition of the 50 per cent reciprocal tariffs is expected to impact these four sectors the most. Labor-intensive sectors like textiles are projected to suffer particularly.

"Boosting the morale of stakeholders (exporters) is essential. Everyone passed a resolution expressing their full support for Prime Minister Narendra Modi. Exporters also stated that they will explore alternative markets," Union Textile Minister Giriraj Singh told NDTV on Wednesday after a long meeting with large textile exporters.

The meeting discussed the strategies required to deal with the impact of the 50 per cent US tariffs. Textile exporters demanded financial assistance from the Union minister to cope with the tariffs and also suggested the introduction of a relief package.