US Expected to Reduce Tariffs on Indian Imports as Trade Deal Nears Completion

The US is expected to bring down reciprocal tariffs on India to 18% from 25% this week and chief negotiator from the Indian side will travel to US next week to finalise the legal text of the interim, commerce secretary Rajesh Agrawal said Monday. As part of the trade deal the US has announced reducing additional tariffs on Indian imports to 18% from 50%. Of the 50% tariffs, 25% that was imposed on India for buying crude oil from Russia has already been removed. The remaining 25% tariffs are for balancing the trade between the two countries. “I am told they are processing it (reduction of reciprocal tariffs). It should be done fast. Our expectation is it should be done this week but in case it is not done, the team is there next week and we can pursue and see why it is taking time,” Agrawal told reporters. Both sides are engaged in finalizing the legal agreement that will finalise the contours of the deal finalised on 2nd February and announced on February 7 . There have been virtual engagements going on and next week the chief negotiator – Joint Secretary in Department of Commerce Darpan Jain – will be leading a delegation to the US to work towards the legal agreement, he said. If the legal text is not finalised next week then there might be a visit of the US delegation to New Delhi. “The effort is to see that we can finalize, close and sign the legal agreement in the month of March. From our side also, any reduction in tariff, any market access, preferential market access will be extended only after the legal agreement is signed,” the secretary said. Agrawal also said that India and the UK are making a “genuine” effort to see if the Comprehensive Economic and Trade Agreement signed in July last year can be operationalised in April this year. On whether some announcement regarding expansion of Preferential Trade Agreement (PFA) between India and four nation MERCOSUR can be made during the visit of Brazilian President Luiz Inacio Lula da Silva this week, he said a joint trade committee under the existing agreement is trying to finalize the scope of expansion which could be completed in next few months. MERCOSUR includes Brazil, Argentina, Uruguay and Paraguay. On the Comprehensive Economic Partnership Agreement (CEPA) with Canada, Agrawal said the two countries are engaged to finalize the Terms of Reference (ToR). The two countries were earlier negotiating a trade pact but it was paused in 2023. Now they have decided to resume talks after the change of the government in Canada and global trade dynamics.