US Promises India Will See Lower Tariffs Than Competitors in Trade Deal

by · WWD
Port of Goa, India.Getty Images

Washington has reportedly made assurances to New Delhi that India see a lower tariff rate than that of its regional competitors as a formalized interim trade deal remains elusive.

An official familiar with the matter told Bloomberg that the first tranche of the agreement will cover goods, leaving services to be hashed out in future negotiations.

India and the U.S. have spent the past two years in talks about a deal that would lower duties and trade barriers and address the trade imbalance between the two nations. While a framework was finalized earlier this year, the Supreme Court’s decision on the Trump administration’s International Emergency Economic Powers Act tariffs threw a wrench into discussions. Indian officials pulled back on talks citing the uncertainty surrounding U.S. trade policy and the future of the tariff regime.

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Tensions also simmered as President Donald Trump continually pointed fingers at purchasers of Russian oil, saying that a number of economies were funding the country’s war effort in Ukraine. This culminated in the passage of the Sanctioning Russia Act in September, which authorized the president to hit the top five purchasers of Russian oil—China, India, Slovakia, Hungary and Azerbaijan—with duties worth up to 100 percent.

As of now, the president hasn’t made good on the threat that the legislation supports, and Washington even brokered its own deal with Moscow to purchase diesel to provide relief at the pump for American consumers who have been bogged down by high gas prices for months. The deal has apparently borne no fruit, as Russian tankers bound for the U.S. in recent days changed course when they couldn’t find buyers willing to accept the cargo.

Trade officials from India and the U.S. have insisted that a trade deal is imminent, with Industry Minister Piyush Goyal in mid-September insisting that an agreement was “almost done and dusted.” Two months later, however, little is known about the terms.

Trump and Indian Prime Minister Narendra Modi may have a chance to meet next month, however, stoking hopes that face time between the two leaders, who have expressed a fondness for each other, could speed up a resolution. Trump will host the Group of 20 (G20) Summit at the Trump National Doral Miami resort on Dec. 14-15. Modi is expected to attend the gathering but his schedule has not been confirmed.

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