India-US trade deal to include enough riders to avoid breaches: Sources

US President Donald Trump with Prime Minister Narendra Modi

India plans to have enough riders in the proposed Bilateral Trade Agreement with the United States (US) to avoid any breaches from either sides, a government official said, while responding to concerns such a deviation by the US with regard to Mexico and Canada.

"Whatever deal we (India) will do with US we will have a recourse to ensure there is no breach from either side," this official said.

US President Donald Trump's administration imposed tariffs on Mexico and Canada, and on steel and aluminium seemingly in violation of the trade agreements between these nations.

The United States-Mexico-Canada Agreement (USMCA) entered into force on July 1, 2020, substituting the North America Free Trade Agreement (NAFTA).

On concerns around a similar situation with regard to India as it aims to broker a trade deal with US, a second government official said, "The deal is between Mexico and Canada, many time these agreements there is a clause for review and terminations... depending on contours of the deal and therefore what are the contours between them and how they are negotiating is their business."

Think-tank Global Trade Research Initiative's founder Ajay Srivastava had earlier warned that this may not be the best time to broker an FTA or a full trade agreement as the US does not respect such agreements. “An example is how the Trump administration has imposed tariffs on Mexico and Canada, and on steel and aluminium in violation of the trade agreements between these nations.

However, the second official added, "Any deal has to benefit all parties, if there is a one-sided deal then they may go for reopening clauses, that is between them (US, Mexico and Canada). These bilateral deals are international treaties, what shape it will take only time will tell. We are now getting into the contours of the treaty as per the roadmap of increasing bilateral trade between India and US."

On February 13, India and US agreed on a new goal for bilateral trade – "Mission 500” – aiming to more than double total bilateral trade to $500 billion by 2030. In a bid to achieve this target the two sides also announced plans to negotiate the first tranche of a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA) by fall of 2025.

Both sides pledged to collaborate to enhance bilateral trade by increasing US exports of industrial goods to India and Indian exports of labour-intensive manufactured products to the United States as well as work together to increase trade in agricultural goods.