India-US trade deal might take at least 6 months: Report
What's the story
The proposed Bilateral Trade Agreement (BTA) between India and the United States is likely to take at least six months to finalize, as per Moneycontrol. This could be beyond the 90-day pause on country-specific tariffs announced by US President Donald Trump. Both nations have agreed on the Terms of Reference (ToR) for the BTA, however, America is yet to reveal its entire list of goods for lower tariffs.
Difficulties ahead
Negotiations to be challenging
The source involved in the negotiations said, "Both sides still have to go to the sectoral bits... we have not reached that stage." They stressed that while an initial framework is ready, wrapping up within the 90-day pause would be difficult and could take at least six months. This is especially true for some chapters due to US's demand for tariff cuts on India's agriculture sector.
Trade negotiations
India's stance on agriculture sector
India has always been protective of its agriculture sector during trade talks. In 2021, India had pulled out of the Regional Comprehensive Economic Partnership (RCEP) free-trade agreement over the potential negative impact on farmers and the dairy industry. The US has not revealed its full list of tariff cuts but mainly wants lower duties on key farm goods, complicating swift conclusion of BTA talks.
Discussions
Areas of potential agreement
Despite the challenges, there are areas where both countries see room for compromise. India is open to reducing taxes on certain farm goods like American almonds and pistachios. In return, it seeks lower duties on exports such as automobile parts and essential medicines.
Goals
Mission 500: Aiming to double trade by 2030
The BTA is a part of 'Mission 500'—a new target to more than double bilateral trade between India and the US to $500 billion by 2030. The Commerce Ministry has said both nations are looking for early mutual wins as they inch closer toward finalizing a multi-sector BTA by end of 2025. In-person sectoral-level engagements are planned from the end of May after productive virtual meetings.