India terms 6th round of talks with US 'positive', eyes early trade deal

Amid the tensions between India and the US on the trade front, India has termed the day-long discussions with the US officials as "positive" and "forward-looking". The commerce ministry, in a statement, said after the conclusion of the sixth round of discussions today, both parties will speed up the next rounds of talks to achieve the much-anticipated trade deal between India and the US.

The team of officials from the office of the United States Trade Representative were led by Chief Negotiator, India-US Bilateral Trade Agreement negotiations, Brendan Lynch. The Indian side was led by the Special Secretary, Department of Commerce.

"Acknowledging the enduring importance of bilateral trade between India and the U.S., the discussions were positive and forward looking covering various aspects of the trade deal. It was decided to intensify efforts to achieve early conclusion of a mutually beneficial Trade Agreement," says the Ministry of Commerce.

The India-US bilateral trade agreement talks were in full swing until US President Donald Trump announced unilateral imposition of 50% tariffs on goods originating from India last month. The decision had also slowed down the bilateral FTA talks as the US negotiators cancelled a scheduled visit to India in August.

The one-day visit of US trade negotiators comes after both Trump and Indian Prime Minister Narendra Modi posted friendly messages on social media as a mutual desire to continue the talks for cooperation in bilateral trade.

Lynch’s visit is believed to be a precursor to further official trade talks between the two countries. Incidentally, trade negotiators of both countries had continued to be in touch through weekly virtual meetings even when formal India-US talks faced a temporary setback in the wake of the punitive tariffs the US imposed on India.

It was during Modi’s visit to Washington in February both leaders launched the new initiative “U.S.-India COMPACT (Catalysing Opportunities for Military Partnership, Accelerated Commerce & Technology) for the 21st Century” to drive transformative change across key pillars of cooperation. Under this initiative, they had committed to a results-driven agenda with initial outcomes this year to demonstrate the level of trust for a mutually beneficial partnership.

The joint statement issued after the meeting had said India and the US will negotiate the first tranche of a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA) by the fall of 2025. The proposed BTA is meant to strengthen and deepen bilateral trade across the goods and services sector, and will work towards increasing market access, reducing tariff and non-tariff barriers, and deepening supply chain integration.

Trump’s tariff measures came in the midst of BTA negotiations. The US had initially imposed a 25% tariff on a substantial number of goods of India-origin stating the country was having a trade deficit with India. Another set of additional 25% tariff was imposed as a punishment for continuing trade relationship with Russia in spite of the US wanting India to stop the purchase of cheap Russian oil.

The tariffs continue to be in force, and the impact of the additional tariff on Indian exports to the US is expected to be reflected in India-US trade numbers in the coming months. An early progress in India-US trade talks could be good news for Indian exporters.