Trade pact talks ahead, Delhi ducks Trump’s fresh salvo on tariff ‘cut’

Delhi offered no immediate response and officials pointed to the statement Friday by Randhir Jaiswal, spokesperson for the Ministry of External Affairs, who said “Commerce Minister Piyush Goyal was in the US and met his counterparts and the two governments were in the process of advancing discussions on a multi-sector bilateral trade pact.” Goyal was said to have returned from the US on Saturday.

There are five broad takeaways from how Delhi views the latest Trump salvo.

First, it was during Prime Minister Narendra Modi’s meeting with President Trump at the White House on February 13 that Delhi and Washington agreed to negotiate the first tranche of a mutually beneficial multi-sector Bilateral Trade Agreement (BTA) by fall this year — in the next seven-eight months.

This, officials said, happened hours after Trump brought up reciprocal tariffs for the first time. So, in a sense, India was able to kick the can down the road and bought time for itself.

Second, the Indian side conveyed the seriousness and urgency to the Trump administration on February 13, saying it would send the lead negotiators once the US side had its Trade Representative in place.

Modi and Trump agreed to designate senior representatives to advance the negotiations. They were to work towards increasing market access, reducing tariff and non-tariff barriers and deepening supply chain integration.

Once the Senate voted 56-43 to confirm Jamieson Greer as the United States Trade Representative on February 26, Goyal and a delegation of officials were sent to hold talks with Greer and US Commerce Secretary Howard Lutnick and their teams from March 3 to 6.

Goyal became one of the first interlocutors to meet both Greer and Lutnick to broadly discuss the contours of the negotiations.

Third, the Indian side views this as a good start to the negotiations since both sides have a common understanding of the proposed deal.

Lutnick framed the broad objective quite well at the India Today Conclave, which he joined virtually after meeting Goyal, where he said: “It’s time to do something big, something grand, something that connects India and the United States together, but on a broad scale, not product by product, but rather the whole thing.”

The Indian view is similar to that of the US, and it was underlined by MEA spokesperson Jaiswal: “Our objective through the BTA (Bilateral Trade Agreement) is to strengthen and deepen India-US two-way trade across the goods and services sector, increase market access, reduce tariff and non-tariff barriers, and deepen supply chain integration between the two countries.”

Fourth, given the broad scope of the deal outlined by both sides, the negotiations will be long and tortuous. This would mean several rounds of discussions between the negotiators at the technical and political levels.

Sources said that discussions on tariffs and other aspects of trade highlighted during the PM’s visit to Washington DC are an ongoing process. There are specifics which have been mentioned on various issues as part of the negotiation.

“It is also natural that both countries have their interests and sensitivities. These are legitimate matters for a discussion,” a source said.

During Trump’s first term, discussions also took place about a limited trade deal between the two nations. For various reasons, it did not produce an outcome.

Since the discussions have just begun, sources said it would be premature to talk about details. There is also a context for each dimension that would reflect the interests of both sides.

Delhi’s view is that there will be no short-cuts in these talks, and each product, sector and concerns will be weighed, and it will have to arrive at its threshold where it can lower the tariffs.

Trump’s salvo is a classic tactic of talking up his demands, and talking down the adversaries at the negotiating table, officials said. “There is no need to take that bait,” an official said, focussing on “closed door negotiations” and not negotiating through megaphones.

Fifth, until the negotiations take place, the Indian side will work with the Trump administration’s negotiators so that the reciprocal tariffs are not imposed. This is the expectation from Delhi’s side, officials said.

Trump just delayed the imposition of tariffs on Canada and Mexico by a month, and Delhi will be looking at a similar situation — until the deal is finalised.

Sources said India has reduced its average applied tariffs significantly for key developed countries like Australia, UAE, Switzerland and Norway under recently concluded mutually beneficial bilateral trade agreements. Similar negotiations are currently underway with the European Union and the United Kingdom, among other partners. The ongoing discussions with the United States should be seen in this context.

So, hours after Trump declared India is ready to yield by lowering tariffs, a top official in Delhi told The Indian Express: “The negotiations have just begun. The timeline is till fall this year. So, watch this space.”