The visit by a US delegation for the next round of trade talks on August 25 is expected to go ahead as planned, government officials told Moneycontrol on August 7, a day after American President Donald Trump announced an additional 25 percent Russia levy on Indian goods.
The sixth round of talks for an initial trade agreement opens August 25 in New Delhi, two days before the 25 percent penalty, which is on top of a 25 percent tariff, for buying Russian oil kicks in.
“The visit of the US team is on schedule, as of now. The talks could stretch to August 27 as well because once negotiations begin, the situation always becomes very dynamic,” one of the officials cited above said. The officials spoke on condition of anonymity.
The Indian negotiators are examining newer sectors, which could be opened to help reduce America’s trade deficit with India, the official said.
Apart from reducing tariffs, increasing energy imports from the US is also likely to be part of the talks.
“There will have to be a fine balance, as energy imports from the US have their limitations as well. The distance, the shipping cost, would add up to an overall increase in price — be it oil, LNG or even coal,” a second official said. “For India, affordability and accessibility are paramount. So, the scope in this sector may not be as wide as the US would hope, but it is also not nil.”
India has, so far, refused to budge on offering sweeping access to American farm and dairy products, which have emerged as a key sticking point between the two countries.
Weighing on the issue, Prime Minister Narendra Modi said on August 7 the country “won't compromise on farmers' interests”. "For us, the interest of our farmers is our top priority. India will never compromise on the interests of its farmers, fishermen and dairy farmers. I know we will have to pay a heavy price for it and I am ready for it. India is ready for it," he said at the MS Swaminathan Centenary International Conference.
Before Trump surprised everyone with the cumulative 50 percent tariffs, India wanted the levy to be lowered to around 15 percent. A “substantial reduction” in tariff would top the Indian agenda, the first official said.
Responding to an emailed query sent by Moneycontrol, a US embassy spokesperson said on August 5 that the country was looking forward to continuing talks for a fair and balanced trade agreement with India. That was before Trump announced the Russia penalty.
“President Trump has made clear his desire to correct longstanding imbalances in international trade and bring back fairness to our trade relationships. We value our ongoing engagement with the Government of India on trade and investment matters and look forward to continuing to advance a trade agreement that leads to a productive and balanced trade relationship between our two countries,” the spokesperson said.
Indian officials cited above added that in the previous rounds of talks, India had agreed to limited concessions on import duties on automobiles and alcohol.
India and the US opened trade talks in March and have held five rounds of negotiations, with the last one held in July in the United States.
The two sides were trying for a mini-version of a trade deal before the August 1 tariff deadline but differences over agriculture and dairy reportedly scuppered the talks.
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