To clinch an early free trade deal with India amid the ongoing tariff turmoil, the US is likely to press New Delhi to accept a tariff package that locks in import levies on Indian goods around 18 per cent, as agreed in the February framework deal. This will be backed with an assurance that more penalties won’t be added after the ongoing Section 301 investigations against India conclude, sources said.
The high-level US trade team visiting India on June 1-4 to push negotiations to conclude the interim trade deal may also throw in a sweetener guaranteeing further tariff reductions in the future aligned with the reduction in America’s trade deficit with India, a source told businessline.
Tariff Lock-In
“The US is keen to close the deal very soon, but it may take a while for its domestic tariff situation to settle down. That is why negotiators are likely to lock in a tariff rate around the 18 per cent level agreed in February. This means additional penalties will not be imposed even if the Section 301 investigations result in an adverse verdict for India in the coming months,” the source explained.
However, India remains uncertain about what tariffs competitors like Vietnam, Bangladesh, Indonesia, or Cambodia will face, which determines how good its own deal is.
