India and the US are engaged in negotiations for an interim trade deal and are trying to finalise the pact before July 9, sources said on Monday.
The high tariffs announced by the US on April 2 were suspended by the Trump administration till July 9.
The US, on April 2, imposed an additional 26 per cent reciprocal tariff on Indian goods but suspended it for 90 days.
However, the 10 per cent baseline tariff imposed by America remains in place. India is seeking full exemption from the additional 26 per cent tariff.
“We are very keen, we are engaged, we are trying. Both sides are trying, but both sides have to be happy,” sources said when asked if the two countries are keen to finalise an interim trade agreement by July 9.
There are always certain areas which are difficult in a trade agreement, they added.
Agriculture and dairy sectors are “difficult and challenging areas for India. And India has not opened up dairy in any of its free trade pacts,” one of the sources said.
The US wants duty concessions on certain industrial goods, automobiles – especially electric vehicles, wines, petrochemical products, dairy, and agricultural items like apples, tree nuts, and genetically modified crops.
India is seeking duty concessions for labour-intensive sectors like textiles, gems and jewellery, leather goods, garments, plastics, chemicals, shrimp, oil seeds, grapes, and bananas in the proposed trade pact.
When asked if the July 9 deadline is not extended, the sources said the tariffs would come to the April 2 level (26 per cent in the case of India).
If it is not extended, India may gain in something and may lose some compared to other countries, but the US will also get affected because of the high tariffs, they said.
There is complete uncertainty over the further extension of tariff suspension beyond July 9.
For the next round of talks, the Indian team may visit the US.
They have fixed a deadline to conclude the first phase by the fall (September-October) this year.
However, dates for the same have not yet been decided.
The US team was here from June 5-11 for the talks. The negotiations will continue both virtually and physically in the days to come.
