Rama Krishna Sangem
India-US trade talks round 6 will begin on September 16, Tuesday. U.S. Trade Representative for South Asia, Brendan Lynch, will make a one-day visit to New Delhi for the discussions. Rajesh Agarwal, India’s chief negotiator and special secretary in the commerce ministry, confirmed this and said, “India and the United States will ‘fast-track’ trade talks.”
This sudden and pleasant development came after a brief period of uncertainty over the India- US trade talks that were supposed to be held in New Delhi from August 25. But, President Trump cancelled them in view of PM Modi plans travelling to China to participate in the SCO summit. There is some degree of unpredictability on the part of the US trade negotiators with regard to their talks with India.
Last week, US President Donald Trump dropped the beginning of the trade talks when he heaped praise on Indian Prime Minister Narendra Modi. Calling him a “very good friend” he said India and the US “are continuing negotiations to address trade barriers… (and) there will be no difficulty in coming to a successful conclusion”.
Prior to this, Commerce Minister Piyush Goyal indicated the first set of deals should be finalised by November. Talking to reporters, he said, “… since March, discussions have been going on… in a very good environment… progress is being made and both sides are satisfied with that progress.”
Punitive tariffs
Trump imposed a punitive additional tariff of 25% over and above the base tariff of 25%, taking the cumulative tariffs to 50%. In most cases, the effective tariffs are higher. The additional tariffs were imposed for buying Russian oil.
However, Washington is upset for other reasons as well. Talking to news website Axios, US Commerce Minister Howard Lutnick said, “India brags they have 1.4 billion people. Why won’t 1.4 billion people buy one bushel of US corn? Doesn’t that rub you the wrong way that they sell everything to us, and they won’t buy our corn? They put tariffs on everything.”
One good thing is that there appears some realization on the part of the US administration that India is a natural and legacy ally to them. And it is unwise to lose a friend like India just for the sake of some tariff revenues. In fact, India was ready to buy defence equipment from the US to reduce the trade gap between the two countries.
