United States President Donald Trump said on Thursday that India had offered a trade deal that proposed almost “no tariffs” on US goods, as the South Asian nation seeks to avert higher import and export costs.
India disputed Trump’s claim. But New Delhi is looking to clinch a trade deal with the US within the 90-day pause announced by Trump on April 9, on so called reciprocal tariffs for major trading partners. On May 8, the White House secured a trade agreement with the United Kingdom, two days after India inked a similar pact with it. India’s equity benchmarks jumped about 1.5 percent following Trump’s comments. The Nifty 50 edged up 1.6 percent while the BSE Sensex gained 1.48 percent, reaching their highest levels in seven months.
India was one of the first countries to begin trade negotiations with the US following Prime Minister Narendra Modi’s visit to the White House in February, with both sides agreeing to finalise a bilateral deal this year. Last month, meanwhile, US Vice President JD Vance visited India and met with Prime Minister Narendra Modi, hailing what he called “very good progress” on a trade agreement between Washington and New Delhi. A 10 percent base tariff continues to apply to India and many other nations during the pause.
India’s average tariff rate is 17 percent, compared with 3.3 percent by the US, as per a report by the Indian Council for Research on International Economic Relations. In recent weeks, India has made overtures to placate Trump’s public disapproval, including lowering import duties on US goods like bourbon whiskey – down from 150 to 100 percent – and Harley-Davidson motorcycles – from 50 to 40 percent. Reuters reported that New Delhi has offered to reduce duties to zero on 60 percent of US imports in a first phase deal, while also offering preferential access to nearly 90 percent of the merchandise India imports from the US.
In theory, this would bring the average tariff differential (the variation in tariff rates countries impose on each other) between India and the US down by 9 percentage points, significantly lowering trade barriers in the world’s fifth-largest economy.Preferential market access – or lower import entry requirements into the US compared with other countries India trades with – is being considered for key goods such as jewellery, textiles and agricultural products like bananas and grapes.
“Preferential market access for India would mean better terms of trade for these goods compared to America’s other trading partners,” an Indian government official who preferred not to be named told Reuters.
Source: Here