The longstanding India-U.S. trade negotiation may soon reach a pivotal point. Signs from both nations indicate progress towards resolution. Former President Donald Trump consistently emphasized the positive strides in discussions, predicting imminent completion. India's officials echoed these sentiments, pointing at upcoming talks as fruitful. Next week, an American delegation arrives in India striving to conclude the first phase of a bilateral trade agreement. This eagerly anticipated meeting could bridge the gaps in this significant deal.
The Three-Day Meetings
Reports suggest that USTR Deputy Representative Rick Switzer will lead the U.S. team in this decisive phase. Scheduled from December 10th to 12th, the focus will be on resolving sticking points in the trade deal, while also debating a reduction of tariffs imposed on India by the U.S.
U.S. Officials Previously Visited on September 16
Notably, in August, Trump doubled the reciprocal tariff on Indian imports due to Russian crude oil purchases, escalating from 25% to 50%. This move temporarily halted progress in the trade agreement talks. However, in September, dialogues resumed as U.S. officials visited India, reviving negotiations. This upcoming engagement marks their second visit following the tariff hike.
Promising Signals for the Deal
Both nations have emitted positive signals regarding the trade partnership. Trump recently expressed optimism about securing a favorable deal soon. Similarly, Indian Commerce and Industry Minister Piyush Goyal and Secretary Rajesh Agarwal forecasted a comprehensive agreement by year's end. Their confidence suggests a settlement of tariff disputes favoring Indian exporters.
Hints of Tariff Reduction
Since February, India and the U.S. have engaged in discussions about the trade deal, completing six negotiation rounds without a conclusive outcome. However, signs are encouraging from both sides. Brokerage firms anticipate a potential cut in the U.S. 50% tariff on India. Nomura recently noted positive bilateral signals foretelling an imminent agreement, predicting a tariff reduction to approximately 20%. A deal is anticipated before year's end.
Objectives of the Trade Deal
The trade agreement aims to elevate bilateral trade to $500 billion by 2030, up from the current $191 billion. Reports indicate America's contribution to India's total goods export is 18%, with imports at 6.22% and total goods trade at 10.73%. For Indian exporters, this agreement holds great significance as the 50% tariff has negatively impacted India's exports to the U.S., down 8.58% consecutively in recent months.
