According to Reuters report on July 13th, during recent negotiations with the United States, India refused to hastily reach a trade agreement and insisted on obtaining better terms.
In late June this year, during the visit of U.S. Trade Representative Gary Locke to India, no temporary trade agreement was finalized between the two sides. An Indian government official who is familiar with the negotiations said that the two parties failed to reach a consensus because the U.S. did not provide guarantees regarding India’s key demands.
Reports state that India's key demands include: India should have advantages in terms of tariff treatment compared to competitors such as China, and no new tariffs should be imposed on India by the United States after the agreement is signed.
The official said, “Our position is clear. We will not hastily reach a deal that is unfavorable to us, nor will we compromise on red-line issues such as agriculture.”
After talks with Grier, India's Minister of Commerce and Industry, Piush Goyal, said that no agreements with the US would be implemented unless a clear advantage was secured. According to Reuters, this indicates that India is taking a more tough stance in negotiations with the US. Despite the higher risk of higher tariffs, India is not in a hurry to achieve quick results.
A US official, who wished to remain anonymous, said that the US side was expecting to reach an agreement and still maintained contact with India. The official also said that India was sometimes slow in its actions during negotiations, had a serious bureaucratic style, and had a tough attitude, hinting at the possibility of achieving consensus between both sides being difficult within the short term.
Where does India have its confidence? According to reports, from April to June this year, despite being affected by disruptions caused by the war in Iran, India’s total commodity exports still increased by about 15% compared to the same period last year. This was mainly due to the increase in the price of petroleum products.
The deputy director of the Policy Research Institute of the American Asian Association and former US trade negotiator Wendy Cutler believes that 'given India's strong economic performance, its efforts to promote diversified cooperation with other partners, and its strategic position internationally, the Indian representatives have more bargaining power in the negotiations.'
In February of this year, India and the United States announced an interim trade framework, which reduced tariffs on Indian goods from 50% to 18%. In exchange, India agreed to lower trade barriers on US products and promised to increase purchases from the US over the next five years. However, subsequent rulings by the US Supreme Court declaring Trump's tariff measures illegal, along with the impact of the US-Iran war, introduced new uncertainties to the progress of the agreement.
According to Reuters, like many countries, the current tariff of 10% still applies to most goods exported from India to the United States. However, the Trump administration expects to impose higher tariffs on India later this month, based on investigations related to industrial overcapacity.
