Will There Be An Indo-US Trade Pact By Diwali?

“We are absolutely clear about the trade talks and are committed to sign the trade pact by October-November,” a person familiar with the developments told The Secretariat.

The talks, which received a fresh impetus with a meeting between Prime Minister Narendra Modi and US Vice-President J D Vance on Monday evening, is being closely monitored, not just in India but in Washington by the top leadership of the two countries, officials said.

Vance’s visit is just ahead of the first in-person trade talks slated to kick off on April 23. The terms of reference are expected to be charted out during the three day talks as the two democracies look to enhance bilateral trade to US$ 500 billion by 2030.

Rajesh Agarwal, Additional Secretary, Ministry of Commerce and Industry — who will take over as Secretary on October 1 after the retirement of Sunil Barthwal on September 30 — is leading the Indian delegation to the US, and will play a crucial role in the trade pact.

Defence Imports, Regulatory Issues On Table

Sources said that the Indian side has extensively prepared for the talks. The focus would be to reach consensus on issues and areas that are of “mutual interest and not thorny”. For instance, India is keen to increase its imports for defence and energy products from the US. The discussions will also touch upon other key issues, including tariffs, non-tariff barriers, rules of origin and regulatory issues.

Technology is another key area that can draw convergence of opinions. Indian steel-makers, who were slapped with a 25 per cent tariff, are hoping that the trade negotiations will resolve the tariff issue.

One of the sources pointed out that though the US will be tough on negotiations, it would seek to expand trade relations with India, especially in light of the intensification of its trade war with China.

“There should be tailor-made solutions for each sector. Certain areas, including the domestic agriculture, micro, small and medium enterprises (MSMEs) need delicate handling, and must be protected at any cost,” Ashwani Mahajan, national co-convener of Swadeshi Jagaran Manch (SJM) said, adding that both countries would need to expand economic co-operation at this juncture.

China Monitoring Vance’s India Visit

Meanwhile, Chinese media organisation Global Times noted that with steep tariffs making Chinese imports less affordable for US consumers, Vance may look to India as an alternative source of goods.

Though the newspaper said that “India's supply chain capacity still falls short of China's, making it difficult to meet US expectations”, the Vice-President’s visit to India “could also include Washington's intention to deepen strategic cooperation with New Delhi,” Qian Feng, director of the research department at the National Strategy Institute at Tsinghua University was quoted as saying.

The timely conclusion of the BTA is crucial for India’s domestic manufacturers and exporters.

It is also understood that New Delhi’s thrust will be more on bilateral trade agreements, which are relatively easier to negotiate. “Multilateral trade pacts are time-consuming and often difficult to navigate. The government will be more open to bilateral deals, given the knotty contours of negotiations,” an insider said.