The visit by India’s Commerce Minister Piyush Goyal to the US this week has raised hopes of a phased trade deal between both sides that sidesteps Washington’s steep tariffs, as New Delhi also pushes for a separate agreement with the European Union (EU) amid rising global protectionism.
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The US initially announced new tariffs last month on imports from various countries, including a 26 per cent levy on India. It later suspended the tariffs on all its trade partners except China for 90 days until July, leaving only a baseline 10 per cent tariff in place and offering room for negotiations.
Trade talks between India and the US were progressing well but appeared to have hit a roadblock after Delhi filed a formal dispute at the World Trade Organization (WTO) earlier this month against a 25 per cent US tariff on all steel and aluminium imports. However, Goyal’s upbeat tone during the US visit indicated that the issue would unlikely block a broader deal between both sides, according to analysts.
“Held a constructive meeting with Secretary @HowardLutnick for a mutually beneficial trade agreement. Committed to enhancing opportunities for our businesses and people,” Goyal posted to social media on Thursday, hours after meeting US Commerce Secretary of State Howard Lutnick.
India and the US would likely announce the outcome of their trade agreement in phases, covering tariffs and other issues, including investments, non-tariff barriers and quality control of goods, analysts said.
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“The main issue of these negotiations [during Goyal’s visit] is to avoid the first tranche of tariffs once the 90-day period is over. India will like a soft landing and will choose certain sectors so that there is no impact,” said Vivek Mishra, deputy director of the strategic studies programme at the Observer Research Foundation.