India and US ‘very close’ to trade deal; work on legal text begins

India and the United States (US) are “very close” to a trade deal, with both sides beginning to work on the proposed agreement’s legalese. After the conclusion of the previous round of talks in Washington last week, both sides are seeing convergence on most issues, a senior government official said, signalling that the long-pending deal could be finalised soon, but it is also subject to the final go-ahead at political level.

 “Not much difference remains (between the two sides) … talks are progressing well. As far as the (previous) contentious issues such as agriculture are concerned, we are finding some common ground,” the official cited above said.

Meanwhile, referring to the proposed trade-deal talks with the US, Commerce and Industry Minister Piyush Goyal on Thursday said there was an acceptance regarding the 50 per cent tariff by Washington on several Indian exports.

“We don’t do deals in a hurry, and we don’t deal with deadlines with a gun to our head. India looks long-term. India never takes decisions in a rush or on the pressure of the moment. If there is a tariff on us, it is there. We are looking at how to overcome that.

We are looking at newer markets. We are looking at a stronger demand impetus within the Indian economy,” Goyal said at the Berlin Dialogue in Germany.

In a blow to India, in August, the US administration imposed a 50 per cent tariff on several Indian goods, including a 25 per cent punitive tariff for purchasing Russian oil. India is bargaining hard with the US for substantial reduction in the additional tariff. That includes removing the 25 per cent punitive tariff and cutting the reciprocal tariff to at least 15 per cent or making it lower than that of its Asian competitors. Currently, the two countries are negotiating a resolution that addresses the pending issues in their trade deal and Washington’s concern over New Delhi’s continued purchase of Russian oil.

The official cited above said issues related to certain non-tariff barriers were yet to be sorted out and were being discussed. For instance, the US has been flagging concern over India’s quality control orders acting as non-tariff barriers for American exporters. The official did not give any detail.

Both sides are communicating virtually. The date for the next round of in-person talks is yet to be scheduled.

Last week, a team of officials of the commerce department, including Commerce Secretary Rajesh Agrawal, was in Washington, with a focus on reaching an early conclusion of the agreement. Talks concluded late last week and the team was back over the weekend.

Despite making progress in the recently concluded round, the two sides were not able to finalise an agreement, amid speculation that Prime Minister Narendra Modi and American President Donald Trump could hold a bilateral meeting at the 47th Asean (Association of Southeast Asian Nations) summit next week.