India-US Tariff Deal / Will tariffs between India and America end? Decision will be taken in BTA meeting

India-US Tariff Deal: Discussions have recently intensified regarding the proposed Bilateral Trade Agreement (BTA) between India and the US. Officials from both countries have been negotiating the agreement since March, and the first phase is targeted to be finalised by September-October this year. The objective is clear—to take the current bilateral trade of $191 billion to $500 billion by 2030. But the biggest question arising in this direction is whether an initiative like a "zero-for-zero duty strategy" is possible between these two countries?

Economic inequality is becoming an obstacle

The economies of India and the US are at different levels of development. While the US is a developed and advanced economy, India is an emerging economy that is still on the path of structural development and industrial competitiveness in many sectors. This is why experts believe that a zero-for-zero duty policy, that is, both sides eliminate duties on each other's imported goods, is not a viable option at the moment.

India's strategic position

Some trade experts have suggested that India could propose to the US to impose "zero-for-zero duty" on select products to counter the retaliatory tariffs imposed by the US. This could benefit India if the agreement is designed in a balanced manner across sectors of goods and services.

"It is not necessary that if the US removes duty on electronics, India will do the same. Trade agreements are always sector-specific and mutually agreed," clarified an official.

Comparison of US-EU deal

While this strategy between India and the US may seem complex, a "zero-for-zero" duty policy between the US and the European Union (EU) appears more likely. This is because of their similar economic position and high industrial base. Duty-free trade between such nations is relatively easy, while for a country like India, this policy could be risky for domestic industries.

Way forward

India and the US have decided to hold sector-specific negotiations in the coming weeks. The decision was taken after a four-day meeting between senior officials of the two countries in the last week of March. Experts believe that the talks will cover sectors such as textiles, pharma, electronics, agriculture and digital trade.

Praising India's trade negotiation capabilities, a senior official said, "India today is far ahead of other countries in terms of negotiating trade deals."