New Delhi | With the deadline of August 1 approaching fast, the last-ditch efforts are on to iron out differences for an interim trade deal between India and the US, sources said.
August 1 marks the end of the suspension period of tariffs imposed by US President Donald Trump on dozens of countries, including India (26 per cent). However, the baseline tariff of 10 per cent remains.
Sources also said that in case the talks for an interim trade deal get extended beyond August 1, the pact would supersede the existing duty structure on the country.
"Talks are on," one of the sources said.
Meanwhile, the US team is visiting India from August 25 for the next round of negotiations for the proposed bilateral trade agreement (BTA) between the two countries.
India and the US teams concluded the fifth round of talks for the agreement last week in Washington. Issues including customs and trade facilitation were discussed during that round.
India's chief negotiator and special secretary in the Department of Commerce Rajesh Agrawal and Assistant US Trade Representative for South and Central Asia Brendan Lynch held the deliberations.
US President Donald Trump has said the trade deal with India is not finalised, as he stressed that India imposes more tariffs than almost any other country.
Trump spoke to reporters on Tuesday on Air Force One on his way back to Washington from Scotland and was asked about the trade deal with India.
"No, it's not," Trump said when asked if the deal with India is finalised.
He was also asked about reports that India is preparing to face higher US tariffs between 20-25 per cent, to which he replied, "I think so." On April 2 this year, Trump announced high reciprocal tariffs. The implementation of high tariffs was immediately suspended for 90 days till July 9 and later until August 1, as America is negotiating trade deals with various countries.
India has hardened its position on the US demand for duty concessions on agri and dairy products. New Delhi has, so far, not given any duty concessions to any of its trading partners in a free trade agreement in the dairy sector.
India is seeking the removal of the 26 per cent additional tariff. It is also looking at the easing of tariffs on steel and aluminium (50 per cent) and the auto sector (25 per cent). These issues are an important part of the trade pact negotiations.
Against these, India has reserved its right under the WTO (World Trade Organization) norms to impose retaliatory duties.
The country is also seeking duty concessions for labour-intensive sectors, such as textiles, gems and jewellery, leather goods, garments, plastics, chemicals, shrimp, oil seeds, grapes, and bananas, in the proposed trade pact.
On the other hand, the US wants duty concessions on certain industrial goods, automobiles, especially electric vehicles, wines, petrochemical products, agri goods, dairy items, apples, tree nuts, and genetically modified crops.
The two countries are looking to conclude talks for the first tranche of the proposed bilateral trade agreement (BTA) by fall (September-October) this year. Before that, they are looking for an interim trade pact.
India's merchandise exports to the US rose 22.8 per cent to USD 25.51 billion in the April-June quarter this financial year, while imports rose 11.68 per cent to USD 12.86 billion.
