There has been news of great relief for India regarding the proposed trade deal with America. Washington has assured New Delhi that under the agreement, India can get better tariffs than its competitor countries. Talks are ongoing between the two countries on a trade agreement and the initial package is targeted to be finalized by the end of the financial year.
Tezzbuzz Desk – Negotiations regarding the proposed bilateral trade agreement (BTA) between India and America are progressing rapidly. News agency ANI quoted a senior Indian government official as saying that America has assured India of tariff benefits in the trade deal compared to its competitor countries.
However, the official also clarified that the actual tariff relief would depend on the tariff structure to be decided in the final agreement. That is, the talks are still going on and only after the final terms are decided, the picture of the actual benefits that India will get will be clear.
Target of first phase deal by the end of the financial year
Talks are going on between India and America on the strategy to complete the trade agreement in several phases. Both the countries are currently trying to finalize the first phase of the agreement i.e. the initial package.
India aims to complete this first phase by the end of the current financial year. Negotiations on an initial package and a comprehensive trade agreement are progressing in parallel.
If India gets better tariffs than competing countries, the competitive position of Indian products in the US market may be strengthened. This is expected to benefit Indian businessmen exporting goods to America.
The relief from tariffs may make it easier for Indian exporters to compete on price levels in the US market. However, its actual impact will depend on the terms and tariff rates to be finalized in the final agreement.
Services will be kept outside in the first phase
Services-related issues will not be included in the first phase of the proposed trade deal. Services-related topics will be negotiated under the second phase of a comprehensive bilateral trade agreement.
Thus, the first package of trade agreement between the two countries will mainly focus on initial trade issues and tariff related provisions.
As talks continue between India and America, now most attention is on how the tariff structure is prepared in the final agreement. The American assurance has certainly raised the hope that India will get a better position than competing countries, but the real relief will be clear only after the final terms are decided.
If the initial package is completed within the stipulated time frame, it can be considered an important step for India-US trade relations.