India and the US are set to have sector-specific trade talks in a virtual format. This is likely to be followed by an in-person meeting in the latter half of May.
India is set to start sector-specific trade discussions with the US to reach a consensus in the much-awaited bilateral trade agreement. Both sides will start bilateral talks this week, Bloomberg quotes a senior official as saying, with both New Delhi and Washington looking to have more clarity about sectors that can offer concessions.
India, US seek to take bilateral trade to USD 500 billion
Earlier in March, representatives from India’s Department of Commerce and the Office of the US Trade Representative held a meeting in the national capital for four days beginning March 26. This was a follow-up exercise, as both countries agreed to expand bilateral trade to reach USD 500 billion by 2030, including through the conclusion of a Bilateral Trade Agreement (BTA).
News agency ANI reports that the virtual meeting between India and the US representatives will be followed by an in-person meeting in the latter half of May, when the Indian trade team will travel to the United States.
What about zero-for-zero tariff strategy?
The US-India trade talks may not witness discussion on the ‘zero-for-zero’ tariff strategy, given the different stages of economic development both nations currently find themselves at.
The zero-for-zero tariff strategy is feasible when advanced economies make a deal among themselves, such as the US and the EU. Conversely, for an economy like India. The strategy is not practically beneficial when the deal is between differing economies like India and the US.
Both India and the US look to conclude the first phase of negotiations by September or October this year. Currently, the India-US trade stands at USD 191 billion, with both countries looking to more than double the bilateral trade to USD 500 billion as envisioned during PM Modi’s meeting with US President Donald Trump in January this year.
What do US, India expect from trade talks?
The United States may seek tariff concessions from India in several sectors, including petrochemicals, dairy, agricultural products, electric vehicles, wines, and industrial goods, among others. India’s demands may centre around duty cuts on labour-intensive sectors, including garments, gems and jewellery, textiles, etc.
Washington also expects New Delhi to open its agriculture market to American businesses. However, it is unlikely that India will include dairy and agriculture in the trade negotiations due to the political ramifications these sectors can have.
