India and US begin work on trade draft; Goyal underlines: No deal with a ‘gun to the head’

In New Delhi, explaining the course of the talks, the senior official said: “There are some non-tariff barriers that are being discussed. Teams had virtual sessions yesterday, and some more virtual talks will happen on Monday. In principle, we have agreed and are finalising the language (of the deal text). As far as the deal is concerned, there is more or less convergence from both sides.”

The official added that “this time” US negotiators could arrive in India for talks.

On a question regarding past differences over oil and agriculture, the official said, “We are finding some common ground (on agriculture). As negotiators, we know there aren’t many differences. We are negotiating positively. Engagement is going well. Having said that, the deal has not been announced. It could happen in the future. Deals are announced at a political level. As negotiators, we know we are close,” the official said.

The official further said that the India-US trade deal, like other deals announced between the US and other countries, won’t be a conventional free trade agreement (FTA). “It won’t be a conventional FTA because there are reciprocal tariffs which are not WTO most-favoured-nation (MFN) tariffs. Normally, deals are negotiated MFN vs MFN. In that context, this will be a different kind of deal,” the official said.

As the US has begun adding more and more items under the Section 232 tariffs net, the official said, “In some of the areas, our efforts will be to address them.”

Underlining the red lines, Goyal said Friday during the Berlin Global Dialogue in Germany that India does not do trade agreements in a hurry or with a “gun to our head”.

The minister was in Berlin to participate in the dialogue, a meeting of leaders and German businesses to discuss ways to boost bilateral trade and investments.

“We are in active dialogue with the EU. We are talking to the US, but we do not do deals in a hurry and we do not do deals with deadlines or with a gun to our head,” he said.

He added that trade deals should be viewed with a long-term perspective. “India looks long-term, India never takes decision in a rush or on the pressure of the moment. And we have accepted if there is a tariff on us, there is a tariff on us. We are looking how to overcome that, we are looking at newer markets, we are looking at a stronger demand impetus within the Indian economy, so we have a very resilient structure. (We are) 1.4 billion people, we are young. So they are not in a situation where they want to do sub-optimal deals, we would like to really look at long term. We recognise that 20-25 years from now, we will be a $30-trillion economy and, accordingly, we will negotiate based on the future. Trade deal is for the long run, to recognise the future and to get the best deal for the country,” Goyal said

When a panelist remarked that India was being asked to rethink its friendship with Russia, Goyal said: “I do not think India has ever decided who its friends will be based on any other considerations other than national interest… and if somebody tells me you can’t be friends with the EU, I won’t accept that, or if somebody tells me tomorrow I can’t work with Kenya, it’s not acceptable.” The decision to buy a particular product from a country is something that the entire world will have to take a call on, he said.

“I was reading in today’s paper that Germany is asking for an exemption from US sanctions on oil… The UK has already sorted or probably got an exemption for procuring oil from the US… so then why single out India?” he said.

Goyal’s remarks come as the US has imposed additional tariffs on India over its imports of Russian oil. On October 22, the US also imposed sanctions on Russia’s two largest crude oil producers, Rosneft and Lukoil, barring all American entities and individuals from conducting business with them.

“Trade deals are for a longer duration. It is not only about tariffs or access to goods and services; it is also about trust and relationships… Trade deals, in a longer context, are far more than just tariffs, and we are too focused on current issues and tariffs,” he added.

India and the US have been negotiating a bilateral trade agreement since March this year. So far, five rounds of talks have been completed. Goyal on Thursday stated that these negotiations are progressing and expressed hope that both sides would work towards a fair and equitable agreement in the near future.

(with PTI, Berlin)