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US asks India to cut duty on agri imports by 35%
Agriculture remains one of the most crucial sticking points between the India-US initial deal, which was expected to be concluded before the previous July 9 deadline
NEW DELHI: The US asked New Delhi to slash average applied tariffs on American agriculture imports to 5% from the existing level of about 40%, with this likely to be one of the key issues of the four-day long trade deliberations set to start in Washington on Monday, people in the know said.
The US wants parity in the average applied tariff for a mutually beneficial and long-lasting bilateral trade relationship, the people added, requesting anonymity . But accepting the US demand is difficult for New Delhi because Indian farmers, operating at the subsistence level, cannot withstand an unequal competition with American commercial farms, they said.
“While a bilateral trade deal should be based on reciprocity, it must also be based on the principle of equity for mutual gains and endurance,” one person said. Washington officially maintains that India’s average applied tariff rate on agricultural products is as high as 39% while its average applied rate on such items is only 5%.
Agriculture remains one of the most crucial sticking points between the India-US initial deal, which was expected to be concluded before the July 9 deadline, the initial date to trigger country-specific 16% punitive levy on Indian goods in addition to a 10% baseline tariff already imposed on several countries, including India from April 5. The July 9 deadline is, however, shifted to August 1 with the Trump administration specifying country-specific duties to over two-dozen countries (ranging from 25% to 50%), but sparing India so far.
“Both teams are working hard to conclude a preliminary deal as soon as possible and the current Washington round could hopefully achieve some breakthrough,” a second person said, adding that the talks will also focus on the first tranche of proposed Bilateral Trade Agreement (BTA).
In a joint statement issued on February 13, Prime Minister Narendra Modi and President Donald Trump announced “Mission 500” to more than double bilateral trade by 2030 through a BTA.
A team of Indian negotiators have already reached Washington for the fifth round of face-to-face negotiations from Monday (the US time), people mentioned above said.
Chief negotiator and special secretary-commerce, Rajesh Agrawal is expected to join the Indian team on Wednesday. The talks are scheduled to be concluded on Thursday, they added.
Experts cautioned the negotiators about the wavering nature of the American leaders on trade matters citing the example of Vietnam. Global Trade Research Initiative (GTRI) founder Ajay Srivastava said: “There is confusion in the US-Vietnam trade deal where Trump announced terms Vietnam never agreed to… On July 2, President Trump took to Truth Social to declare a deal had been reached with Vietnam. He claimed that Vietnamese exports to the US would face a 20% tariff while US goods would enter Vietnam duty-free. But Vietnamese negotiators point out that they agreed to 11% and not 20% rate. As of now, Vietnam has not formally accepted this key provision, and the dispute remains unresolved.”
