US assures India of lower tariffs than rival economies in trade deal: Govt official

The United States has assured India that it will receive a comparative tariff advantage over competing economies under the proposed bilateral trade agreement, a senior government official told news agency ANI on Saturday, even as negotiations on the first tranche and the broader pact continue.

"The US has assured India of a comparative tariff advantage over its competitors in the trade deal. We will have to see how the tariff framework unfolds," the official said.

However, the official cautioned that the extent of the advantage would depend on the final tariff structure. India is also awaiting the outcome of the second investigation initiated by the Office of the United States Trade Representative (USTR) against the country.

India aims to conclude the first tranche of the agreement by the end of the current financial year. Negotiations on the initial package and the broader Bilateral Trade Agreement (BTA) are progressing simultaneously, the official said.

Services-related issues will not feature in the first tranche and will instead be addressed in the second phase as part of the larger agreement.

The final agreement is expected to take the form of a legal text with annexures and include a dedicated chapter on customs and trade facilitation, the official added.

Earlier, another senior Commerce Ministry official told ANI that India and the US held discussions on customs and trade facilitation last week. A two-member US delegation visited India on November 2 and 3 for discussions on these issues.

The negotiations have been progressing in phases, with both countries seeking early gains through the first tranche while continuing discussions on more complex aspects of the broader agreement.

INDIA WILL HAVE ONE OF THE BEST TRADE DEALS: PIYUSH GOYAL

Commerce and Industry Minister Piyush Goyal on Thursday expressed confidence in the outcome of the negotiations, saying India would secure one of the best trade agreements with the US.

"And in every respect, India will have one of the best deals with the US," he told reporters.

Goyal said India had negotiated a very good set of outcomes with Washington under the proposed agreement.

"Nations that make the same products and are at a similar level of development, like India. We will have the most preferred market access in the US post the deal in products of our interest," he said.

Asked about the timeline for the agreement, Goyal said negotiations were ongoing and several factors would determine the outcome.

He also clarified that the recent visit by US officials primarily involved discussions with India's customs authorities.

"The Deputy Chief Negotiator had come for discussions with the customs department on one track," he said.

On the potential impact of India's trade agreements on exports, Goyal said it was too early to assess the outcome, as the agreement with the European Union was yet to become operational.

"It's too early to tell because, as you are aware, the 'mother of all deals', the EU agreement is not yet operational. The US will take some time before it comes into effect," he said.

Goyal also revealed that Guatemala and Ecuador had expressed keen interest in discussing separate trade agreements with India.

"India today is looked upon as the trusted partner of the world. Otherwise they would not be wanting to do trade agreements with India. They would not be looking to India as a part of their global value chains," he said.

A two-member US delegation visited India earlier this month to discuss trade and customs facilitation. Both sides remain in regular contact as they work towards finalising the first phase of the BTA.

India and the US finalised the framework for the first phase of the agreement in February. However, changes in the US tariff landscape have necessitated further negotiations.

India is seeking lower tariffs on its exports to the US than those imposed on competing economies such as Bangladesh, Vietnam and Cambodia.

The negotiations have also assumed significance following US President Donald Trump's crushing defeat in the mid-term elections. In the mid-term elections, the Democrats won the Senate and the House, taking control of Congress for the rest of Donald Trump's presidency.

Asked whether the election results could affect the pace of trade negotiations, Goyal said India did not link its trade relations with domestic political developments in other countries.

"We do not link our trade relations with internal elections or results of any kind," he said.

The US imposed an additional 10 per cent import duty on several countries, including India, from July 24. The additional duties followed a US investigation into forced labour issues under Section 301 of the US Trade Act of 1974 and apply over and above the existing Most Favoured Nation (MFN) tariff rates.

On the issue concerning whiskey under the India-UK trade agreement, Goyal said the matter involved operational difficulties that authorities were working to resolve.

"Whenever there is any new agreement, there are some operational issues. Probably this is one of those which is being sorted out," he said.