India seeks full tariff relief in US trade pact

New Delhi

India is pushing for full exemption from a 26% reciprocal tariff on its goods as final talks continue on a bilateral trade agreement (BTA) with the United States. Commerce Minister Piyush Goyal, now in Washington, is leading the discussions. The interim deal may be signed by July 8.

Goyal met US Commerce Secretary Howard Lutnick on Friday, following a May 20 meeting. He called their talk “constructive” and said both countries aim to boost trade opportunities.

The 26% tariff, imposed by President Donald Trump on April 2, is currently suspended until July 9. India wants the exemption to be permanent. In return, the US seeks tariff cuts from India on electric vehicles, wine, petrochemicals, and farm goods. However, India remains cautious about allowing genetically modified crops.

India also hopes the US will reduce duties on labour-intensive Indian exports like textiles, garments, chemicals, jewellery, and manufactured goods.

Both nations hope the BTA will double trade to $500 billion by 2030. Currently, bilateral trade stands at $131.84 billion. India has had a $41.18 billion trade surplus with the US, its largest trading partner for the past four years.

The US is eager to strike a deal, especially after India signed an FTA with the UK earlier this month. With pressure mounting, the July 8 deadline could be crucial for both countries' economic goals.