Winning Bizness Desk
Mumbai. US President Donald Trump claimed on Wednesday that America is close to finalizing a trade agreement with India. Referring to his recent deal with Indonesia, he said that similar terms could apply to India, where American products might soon enjoy zero tariff entry. Trump added that once he sends an official letter, the agreement with India will materialize quickly.
US imposes tariffs on Indonesia, exempts its goods in return
On Tuesday, Trump imposed a 19% tariff on imports from Indonesia, effective from August 1. However, under a reciprocal agreement, Indonesian markets will not impose any tariffs on American goods. Trump mentioned that such reciprocal trade pacts have already been executed with several strong nations and that India could be next.
More countries face higher US tariffs, India gets brief relief
The Trump administration recently raised tariffs on over 100 countries. On April 2, India was slapped with a 26% tariff, though its implementation was postponed for 90 days. By July 17, the US had already imposed 20% to 50% tariffs on 24 countries, including Japan, Brazil, South Korea, and the European Union. India, however, has not yet received a formal notice.
India seeks under 10% tariff rate in ongoing negotiations
An Indian commerce delegation has been in the US since Monday to work out a resolution. Talks are expected to continue till Thursday. As per Bloomberg reports, India wants tariffs on its exports to be capped below 10%. In exchange, the US is demanding more market access, but India is firm on not opening up its agriculture and dairy sectors to foreign players.
India offers concessions, but on its own terms
India has reportedly proposed to eliminate tariffs on American industrial goods if the US reduces duties. India has also expressed interest in offering a larger market for US agricultural goods and is considering purchasing more aircraft from Boeing. However, all such offers are strictly limited to non-agriculture sectors.
Deal deadline approaches, India in no hurry to compromise
A crucial element in these negotiations is the August 1 deadline. If no agreement is reached by then, the US could impose an additional 16% tariff on Indian exports, over the existing 10% baseline. This could significantly impact Indian businesses exporting to the US. Still, India maintains that it won’t rush into an agreement just to meet a deadline. Commerce Minister Piyush Goyal stated that any deal must be fully prepared, aligned with national interests, and thoroughly evaluated.
7 Key Takeaways:
- Trump claims a US-India trade deal is almost finalized.
- He wants a zero-tariff model like the one with Indonesia.
- India currently faces a delayed 26% tariff, imposed in April.
- A commerce team from India is in the US to negotiate terms.
- India wants tariffs under 10%, refuses to open its farm sector.
- A deal must be reached before August 1 to avoid extra tariffs.
- India insists it won't be pressured by deadlines into accepting unfair terms.
