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India-US Trade Deal: Upcoming Legal Pact in Focus
New Delhi: India’s chief negotiator for trade talks with the United States, Darpan Jain, is set to lead a delegation to Washington next week to finalize the legal agreement of the India-US trade deal. This crucial agreement is expected to be signed in March, as confirmed by Commerce Secretary Rajesh Agrawal.
Key Details of the India-US Trade Deal Negotiations
– Current Trade Figures: India’s agricultural exports to the US stand at approximately $2.8 billion, while imports amount to $1.5 billion.
– Delegation Arrival: The delegation’s visit is scheduled to commence on February 23.
– Framework Established: Earlier this month, India and the US announced a finalized framework for an interim trade agreement. Agrawal noted, “The joint statement outlines the contours of the deal, which will soon be drafted into a legal agreement between both nations.”
Legal Agreement and Timelines
– Next Steps: Ongoing virtual discussions are taking place to finalize the legal pact. Agrawal mentioned, “Darpan Jain will lead efforts to finalize the legal agreement next week in Washington and may continue this work in March and July if necessary.”
– No Hard Deadline: Agrawal pointed out that while there is a goal to finalize the deal by March, he has refrained from establishing a strict deadline due to the complexities involved in the legal agreement.
Tariffs and Market Access
– Recent Developments: Washington recently lifted the 25% punitive tariffs on India for purchasing Russian crude. However, the implementation of reducing reciprocal tariffs on Indian goods from 25% to 18% is still pending. Agrawal expressed optimism that this should be resolved shortly.
– Agreements in Place: The interim pact stipulates that reciprocal tariffs will decrease to 18%, with further reductions to zero being addressed after the legal agreement is signed. Agrawal emphasized, “Any tariff reduction or preferential market access from our side will also depend on the completion of the legal agreement.”
Cotton and Garment Access
– Concessional Duty Access: India is seeking duty concessions for garments produced with American yarn and cotton, similar to benefits provided to Bangladesh under a US trade agreement. The secretary noted that India typically imports around $200-$250 million of US cotton annually.
Agricultural Trade Potentials
– Sector Opportunities: Trade agreements between India and the US have opened up a potential market opportunity worth $400 billion for India’s agriculture sector. Presently, India’s overall agricultural exports valued at approximately $51-52 billion, with imports totaling around $35 billion.
– US Market Details: India’s non-marine agricultural exports to the US are valued at roughly $2.8 billion, while imports are at $1.5 billion.
Digital Trade and Future Discussions
– Ongoing Negotiations: While agriculture and digital trade are included in US considerations, topics like digital taxes and e-commerce moratorium were not slated for discussion in this initial tranche of the trade deal. An official elaborated that both sides need to identify barriers to digital trade as part of the business trade agreement moving forward.
Conclusion
As the India-US trade deal progresses toward legal finalization, key issues such as tariff reductions and agricultural access remain pivotal. The upcoming meetings in Washington are set to shape the path forward, with hopes to unleash significant trade benefits for both nations. The successful conclusion of the legal agreement will be critical to enhancing bilateral trade relations and achieving mutual economic goals.