India keen on interim trade deal with US in pause period

Separately, External Affairs Minister S Jaishankar said Friday India is trying to communicate to the US, the European Union and the UK on the urgency to conclude trade deals. Washington has been “fairly quick to respond” to Delhi’s proposal, he said.

“We are trying to, in each case, get the other side to speed it up. This was normally a complaint which was to be made about us in the past, that we were the guys slowing it down,” he said, adding, “It’s actually the other way around today. We are trying to communicate that urgency to all three accounts (the US, EU, the UK),” he said in his address at the Global Technology Summit organised by Carnegie India and the Ministry of External Affairs.

“My sense probably is in terms of other parties’ response — at least the US has been so far fairly quick to respond to whatever has been tabled. Now we have to see after April 2 how that picks up,” he said.

“Within a month of change in the administration, we have conceptually an agreement that we will do a bilateral trade agreement; that we will find a fix that will work for both of us because we have our concerns too. And it’s not an open-ended process,” he said.

The Terms of Reference, which outline the framework of the proposed Bilateral Trade Agreement (BTA) and typically require clearance from the highest political office before negotiations begin, could not be signed when the US trade team was here in the last week of March.

The Indian Express had reported on April 2 that India had signed a ToR with the US just ahead of the reciprocal move, following an intervention from the Prime Minister’s Office (PMO) to expedite the finalisation of the trade deal’s contours.

Referring to the trade talks that did not fructify into a trade pact during Trump’s first term, Jaishankar said, “We did four years of talking with the first Trump administration. They have their view of us and frankly we have our view of them. The bottom line is that the deal did not get through.”

On the FTA talks with the EU, he said, “If you look at the EU, often people say we’ve been negotiating for 23 years which is not entirely true because we had big blocks of time when nobody was even talking to somebody else. But they have tended to be very protracted processes.”

“This time around, we are certainly geared up for a very high degree of urgency. I mean, we see a window here. Our trade teams are really charged up… These (Indian negotiators) are people very much on top of their game, very ambitious about what they want to achieve,” he said.

On the EU FTA, Commerce Minister Piyush Goyal said there is progress but challenges remain, particularly around non-trade issues being linked with climate regulations. “Europe must reconsider the non-tariff barriers it has created. These are becoming trade hurdles not just for India but for the global economy,” Goyal said at the Global Technology Summit.

Notably, India has raised concerns over EU’s carbon tax that could impact India’s steel industry in particular and much of the manufacturing in the country.

On the global trading order, Goyal said, “The world cannot be viewed through a single lens. While developed nations enjoy prosperity, developing and least-developed countries must be given time and support to catch up. The WTO must recognise this and evolve accordingly.”

India remains committed to multilateralism, he said.  However, reforms at the WTO are essential. Goyal cited the need to reassess the definition of “developing countries” and called for clarity on e-commerce rules, agriculture decisions, and fisheries negotiations. “Unless those who have caused overfishing are willing to scale down, emerging economies will never get a fair chance,” he said.

Reiterating India’s support for WTO principles, he said, “India will always work within the WTO framework. Our bilateral agreements, including with the US and EU, operate within its scope.”

On April 9, hours before Trump announced a pause on the 26 per cent reciprocal tariffs, Jaishankar had underlined that Delhi is engaging with Washington to firm a bilateral trade pact by fall this year.

Delhi had also refused to get drawn into a riposte after US President Donald Trump’s pejorative-filled language to describe countries looking to negotiate a deal, in a bid to avoid tariffs on them.

Jaishankar had said, “I don’t think it’s possible to speak about what would be the impact, because we don’t know…What is our strategy? I think that’s pretty clear… We decided that we will engage the Trump administration early on this set of issues and we were very open with them, very constructive with them as they were with us, and what we agreed to do was to try to negotiate a bilateral trade agreement by fall of this year.”

The Ministry of External Affairs’ official spokesperson Randhir Jaiswal, while responding to questions, had said India was carefully examining the implications of the various announcements made by the US. “Discussions are ongoing between Indian and US trade teams for the expeditious conclusion of a mutually beneficial, multi-sectoral Bilateral Trade Agreement. India values its comprehensive global strategic partnership with the US and is committed to working closely with it,” the MEA spokesperson had said.

Following talks between Prime Minister Narendra Modi and Trump in Washington DC in February, the two sides announced to negotiate the first tranche of the Bilateral Trade Agreement by the fall of 2025.

“I think we are the only country after President Trump has assumed presidency the second time, which has actually reached such an understanding in principle,” Jaishankar said.

On April 7, Jaishankar spoke to US Secretary of State Marco Rubio and “agreed on the importance of the early conclusion of the Bilateral Trade Agreement”.