Govt sources: India awaits American response on trade deal

Government sources have told CNBC-TV18 that India is awaiting a response from the government of the United States on the Bilateral Trade Agreement (BTA) being negotiated between both sides, stating that a fresh round of talks is not needed at this stage. Indicating that India's negotiations have been the most detailed and WTO-compliant compared to other countries, government sources informed that due care has been taken to negotiate all pending issues across different sectors.

Last month, government sources had told CNBC-TV18 that India and the United States are converging on most trade issues and are "very close to a deal" with both sides engaged in technical discussions on issues like non-tariff barriers. Expressing hope for the 1st tranche of a trade deal soon, government sources had indicated that both sides are negotiating very positively and finding some common ground on pending issues.

Stating that the current discussions are not akin to conventional FTA negotiations, as reciprocal tariffs aren't based on WTO norms, government sources had clarified that both sides are bound by confidentiality to not speak about the contours of the deal till it is announced. Highlighting that India is facing one of the highest US tariffs since August, government sources pointed out that while the deal is not finalized yet but no new issues are arising as of now and India remains hopeful of tariff concessions on its exports of Steel and Aluminium.

In August this year, India had described the US tariffs on Aluminium and Steel as violative of World Trade Organization (WTO) rules and gad informed Parliament that it reserves the right to suspend substantially equivalent concessions due to the US’ non-compliance with obligations under the WTO’s Agreement on Safeguards (AoS). India's Commerce and Industry Ministry said the US had declined its request for consultations under the WTO AoS regarding tariffs on aluminium, steel and related derivative products. The US had stated that the measures were imposed under Section 232 of its Trade Expansion Act on national security grounds, claiming they fall within the scope of the General Agreement on Tariffs and Trade (GATT) 1994, which allows such exceptions.

Despite 50% tariffs imposed on imports by the United States, India's exports to the US rose to $45.82 billion in the 1st half of the current FY, 13.3% more than $40.42 billion in same period last year. Earlier this month, the Commerce Ministry had said that India would like to diversify its energy import portfolio, subject to availability at the right price, stating that India can import more crude oil and natural gas worth $12-$13 billion from the US without altering the configuration of refineries.

On the India-US trade talks, the Commerce Ministry had said that the US is in a shutdown and with a reduced workforce, the time isn't right for a full-fledged negotiation. Stating that "there is lot of noise in the air" on engagement between both the sides, the Commerce Ministry said that it was heartening to see exports keep pace during global turbulence, with the industry maintaining business relations and supply chains and even absorbing costs. US Ambassador-designate to India had recently met India's top leadership.

The Commerce Ministry said that the impact of tariffs on India-US trade will be studied based on commodity-wise data, with an almost certain impact on sectors facing 50% tariffs, adding that October's trade data will give a firmer picture. The Ministry indicated that while India is still doing better in exports to the US compared to the previous year, there are parts of supply chains fighting challenges to trade.Read about our editorial guidelines and ethics policy