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India has provided “deep” cuts to its import tariffs on a swath of products in talks with the US, however is in search of to retain its excessive levies on delicate agricultural commodities resembling foodgrains and dairy merchandise, in response to two folks with information of the negotiations.
The federal government of Prime Minister Narendra Modi is racing to safe a preliminary commerce settlement with the US to forestall President Donald Trump’s threatened imposition of a 26 per cent “reciprocal tariff” on all Indian items from July 9.
“There is a possibility of a very deep tariff reduction from India under the bilateral trade agreement,” mentioned one of many folks accustomed to India’s stance on the talks, who requested to not be recognized as a result of they have been confidential. “But this is subject to a very balanced outcome for both sides.”
The folks with information of the talks declined to provide particulars of the vary of US items on which New Delhi had provided to considerably reduce tariffs as a result of the negotiations have been at an “early stage” and is perhaps sophisticated by any backlash from affected industries.
However they mentioned India’s commerce negotiators had signalled flexibility on much less delicate farm merchandise resembling almonds, that are presently topic to tariffs of as much as 120 per cent, and New Delhi may also reduce its tariffs of two.5 to three per cent on imported oil and gasoline.
Indian commerce officers have privately mentioned any opening to the US would largely mirror that seen in different latest commerce pacts. In a cope with the UK agreed this month, India agreed to chop tariffs on alcoholic spirits, automobiles together with electrical automobiles and automobile components, and engineering items.
The descriptions of India’s provide to this point counsel it can fall far in need of expectations voiced by Trump final month, when he mentioned: “They’ve offered us a deal where basically they’re willing to literally charge us no tariff.”
India’s commerce negotiators have been taking a agency line on retaining its hefty duties on core agricultural commodities resembling wheat, rice and maize and on dairy merchandise, sectors that make use of tens of millions of Indians, the 2 folks mentioned.
India presently imposes tariffs of 70-80 per cent on US rice and of 30-60 per cent on American dairy merchandise.
For its half, New Delhi has pushed Washington to chop US tariffs for items made by labour-intensive industries together with gems and jewelry, textiles, footwear, leather-based and handicrafts, the folks mentioned.
Modi’s authorities would additionally push for social safety fee exemptions for Indian staff posted to the US on short-term visas. India has requested Washington to grant this earlier than and gained an analogous concession from the UK within the settlement introduced this month.
India’s commerce ministry declined to remark. The White Home, US commerce division and workplace of the US commerce consultant didn’t instantly reply to requests for remark.
Trump in early April paused for 90 days the “reciprocal tariffs” he imposed on India and scores of different nations, however retained a blanket import obligation of 10 per cent.
India, which has a few of the world’s highest common tariffs, is now speeding to safe a framework settlement with the US. Indian commerce minister Piyush Goyal met US counterpart Howard Lutnick and US commerce consultant Jamieson Greer in Washington final week.
The 2 nations say they plan to agree the primary tranche of a bilateral commerce settlement by the autumn and to greater than double bilateral commerce to $500bn by 2030.
India, the world’s largest milk producer, has efficiently pushed to guard massive, politically delicate sectors resembling dairy in different latest commerce pacts, together with one with Australia in 2022. India has virtually 200,000 dairy co-operative societies totalling about 15mn members, primarily small herding households.
India and the US have two of the world’s three largest farming sectors, however New Delhi has since independence in 1947 saved excessive tariff partitions round agriculture, which employs practically half of the workforce of the world’s most populous nation. Agriculture is a delicate matter for the Modi authorities, which was in 2021 compelled to abandon laws reforming the sector after mass farmer protests.
India has made comparable calls for to guard dairy and different delicate farming sectors in commerce talks with the EU, in response to senior European diplomats and Indian officers in New Delhi. Nevertheless, the negotiations with Washington are notably difficult because the US is India’s largest buying and selling companion, and Trump has continuously criticised its excessive import levies, as soon as even calling it a “tariff king”.
Trump final week criticised iPhone maker Apple’s plans to increase manufacturing in India, which has already helped make cell phones one of many nation’s largest exports to the US.
