‘Zero-for-Zero’ tariff strategy unlikely in proposed India-US trade deal: Official

PM Narendra Modi and Donald Trump (File photo-ANI)

The proposed India-US bilateral trade settlement is unlikely to incorporate a ‘zero-for-zero’ tariff strategy, as the 2 nations are at completely different levels of financial growth, official sources stated. The concept, although floated by trade specialists to counter reciprocal tariff hikes by the US, doesn’t align with how trade offers are usually negotiated, officers famous.
A senior official defined that such a strategy — the place either side remove tariffs on related merchandise — is possible between superior economies just like the US and the European Union, however not between international locations with differing financial buildings like India and the US, as reported by PTI.
“Trade agreements do not happen like this — if they go zero on electronics, we will too. That is a wrong notion,” the official remarked. Instead, India and the US are working towards a extra complete “package deal” overlaying a variety of points, together with items, companies, and non-tariff limitations.
Negotiations for the bilateral trade settlement started in March, with each international locations aiming to conclude the primary section by September or October this yr. The aim is to greater than double bilateral trade to $ 500 billion by 2030, up from round $ 191 billion at present.
Officials confirmed that sector-specific discussions might be held in the approaching weeks following 4 days of preliminary talks that concluded on March 29. India can also be stated to be considerably forward of different nations in phrases of readiness for negotiating trade agreements.
The zero-for-zero idea was beforehand urged by the Delhi-based suppose tank Global Trade Research Initiative (GTRI). Under this method, India would remove tariffs on chosen American items in change for equal US concessions. However, the present stance signifies the Indian authorities prefers a broader and extra balanced negotiation framework.
In phrases of trade pursuits, the US is in search of tariff concessions in sectors comparable to industrial items, electrical autos, wines, petrochemicals, dairy, and agricultural merchandise together with apples, tree nuts, and alfalfa hay. India, alternatively, is prone to push for responsibility cuts on labour-intensive sectors comparable to textiles, clothes, gems and jewelry, leather-based, plastics, chemical compounds, oil seeds, shrimp, and horticulture.
The US has remained India’s largest buying and selling accomplice for the previous three monetary years, accounting for about 18 per cent of India’s complete exports, 6.22 per cent of imports, and 10.73 per cent of general bilateral trade.
India recorded a items trade surplus of $ 35.32 billion with the US in 2023-24, up from $ 27.7 billion in 2022-23. Key Indian exports to the US in 2024 included drug formulations and biologicals ($ 8.1 billion), telecom devices ($ 6.5 billion), valuable and semi-precious stones ($ 5.3 billion), and petroleum merchandise ($ 4.1 billion). Imports from the US featured crude oil ($ 4.5 billion), petroleum merchandise ($ 3.6 billion), coal and coke ($ 3.4 billion), and plane and spacecraft components ($ 1.3 billion), amongst others.