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India has provided “deep” cuts to its import tariffs on a swath of products in talks with the US, however is in search of to retain its excessive levies on delicate agricultural commodities equivalent to foodgrains and dairy merchandise, in keeping with two folks with data of the negotiations.
The federal government of Prime Minister Narendra Modi is racing to safe a preliminary commerce settlement with the US to forestall President Donald Trump’s threatened imposition of a 26 per cent “reciprocal tariff” on all Indian items from July 9.
“There’s a chance of a really deep tariff discount from India beneath the bilateral commerce settlement,” stated one of many folks aware of India’s stance on the talks, who requested to not be recognized as a result of they have been confidential. “However that is topic to a really balanced end result for each side.”
The folks with data of the talks declined to provide particulars of the vary of US items on which New Delhi had provided to considerably lower tariffs as a result of the negotiations have been at an “early stage” and is likely to be difficult by any backlash from affected industries.
However they stated India’s commerce negotiators had signalled flexibility on much less delicate farm merchandise equivalent to almonds, that are at present topic to tariffs of as much as 120 per cent, and New Delhi may additionally lower its tariffs of two.5 to three per cent on imported oil and fuel.
Indian commerce officers have privately stated any opening to the US would largely mirror that seen in different current commerce pacts. In a deal with the UK agreed this month, India agreed to chop tariffs on alcoholic spirits, automobiles together with electrical automobiles and automotive components, and engineering items.
The descriptions of India’s provide to date counsel it is going to fall far in need of expectations voiced by Trump final month, when he stated: “They’ve provided us a deal the place mainly they’re keen to actually cost us no tariff.”
India’s commerce negotiators have been taking a agency line on retaining its hefty duties on core agricultural commodities equivalent to wheat, rice and maize and on dairy merchandise, sectors that make use of hundreds of thousands of Indians, the 2 folks stated.
India at present imposes tariffs of 70-80 per cent on US rice and of 30-60 per cent on American dairy merchandise.
For its half, New Delhi has pushed Washington to chop US tariffs for items made by labour-intensive industries together with gems and jewelry, textiles, footwear, leather-based and handicrafts, the folks stated.
Modi’s authorities would additionally push for social safety cost exemptions for Indian employees posted to the US on short-term visas. India has requested Washington to grant this earlier than and gained an analogous concession from the UK in the agreement introduced this month.
India’s commerce ministry declined to remark. The White Home, US commerce division and workplace of the US commerce consultant didn’t instantly reply to requests for remark.
Trump in early April paused for 90 days the “reciprocal tariffs” he imposed on India and scores of different international locations, however retained a blanket import responsibility of 10 per cent.
India, which has a few of the world’s highest common tariffs, is now dashing to safe a framework settlement with the US. Indian commerce minister Piyush Goyal met US counterpart Howard Lutnick and US commerce consultant Jamieson Greer in Washington final week.
The 2 international locations say they plan to agree the primary tranche of a bilateral commerce settlement by the autumn and to greater than double bilateral commerce to $500bn by 2030.
India, the world’s largest milk producer, has efficiently pushed to guard massive, politically delicate sectors equivalent to dairy in different current commerce pacts, together with one with Australia in 2022. India has virtually 200,000 dairy co-operative societies totalling about 15mn members, primarily small herding households.
India and the US have two of the world’s three largest farming sectors, however New Delhi has since independence in 1947 stored excessive tariff partitions round agriculture, which employs practically half of the workforce of the world’s most populous nation. Agriculture is a delicate subject for the Modi authorities, which was in 2021 pressured to abandon legislation reforming the sector after mass farmer protests.
India has made related calls for to guard dairy and different delicate farming sectors in commerce talks with the EU, in keeping with senior European diplomats and Indian officers in New Delhi. Nevertheless, the negotiations with Washington are notably difficult because the US is India’s largest buying and selling companion, and Trump has ceaselessly criticised its excessive import levies, as soon as even calling it a “tariff king”.
Trump final week criticised iPhone maker Apple’s plans to broaden manufacturing in India, which has already helped make cellphones one of many nation’s largest exports to the US.
