Kathmandu. No sign of Indian tariff cuts as US trade mission ends. India and the United States have agreed to finalize part of a bilateral trade deal by this year.
However, neither side has hinted at any tariff cuts for the world’s most populous nation. The two countries have been holding trade talks in New Delhi since April 2, days after US President Donald Trump launched a trade tariff regime. The talks include punitive import duties (tariffs) against India. India’s protectionist policies and its trade surplus with the United States have left it open to potential retaliatory tariffs from the Trump administration.
“Officials from both sides have broadly agreed on the next steps towards a mutually beneficial, multi-sectoral bilateral trade agreement (BTA), with the aim of finalizing its first tranche by the end of 2025,” India’s commerce ministry said in a statement on Saturday. “The two countries exchanged views on deepening bilateral cooperation in priority areas such as increasing market access, reducing tax and non-tariff barriers, and deepening supply chain integration.”
The statement did not indicate whether any action would be taken on those barriers before Tuesday, when new US tariffs are set to be imposed on trading partners around the world. Credit rating agency India Ratings and Research has forecast that the proposed taxes could cut US exports by $7.3 billion in the coming fiscal year. India, the world’s fifth-largest economy, has been seeking to ease trade tensions with Washington by cutting tariffs on some products including high-end motorcycles and bourbon whiskey in the past two months.
Ahead of this week’s trade mission, Indian media reports suggested the government could propose eliminating taxes on online services such as advertising. New Delhi is also keen to cut taxes on cars, electronics and medical services, the reports said. The Indian Express newspaper quoted an unnamed government official as saying on Sunday that the counterparts had “reached a significant understanding on the outline of a trade deal.”
“However, they had not finalised the terms of reference to clearly define the scope of the trade deal,” the report said. The US decision to impose a 25 percent tax on countries that buy oil from Venezuela will also affect India, a major buyer of the Latin American country’s crude. Trump has called India “one of the highest taxing countries in the world” and has indicated that “it’s going to work out very well” with New Delhi, without elaborating.
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