India to Focus on Industrial Goods Tariffs in US Trade Talks

India is advised to focus solely on industrial goods tariffs during trade talks with USTR Brendan Lynch, as recommended by GTRI. The proposed agreement aims for conclusion by fall 2025. GTRI urges avoiding discussions on sensitive issues and highlights risks due to the lack of Fast Track Trade Authority in the US, which could lead to uncertainties in the agreement’s execution.

In discussions with Assistant US Trade Representative (USTR) Brendan Lynch, India is advised to prioritize industrial goods tariffs according to the Global Trade Research Institute (GTRI). Lynch’s five-day visit beginning March 25 aims to advance bilateral trade discussions and finalize a proposed bilateral trade agreement (BTA) with the goal of completion by fall 2025.

GTRI suggests that India should eliminate tariffs on 90% of industrial tariff lines, contingent upon similar actions by the US. This approach targets approximately 90% of bilateral merchandise trade between India and the US. Furthermore, GTRI cautions against engaging in negotiations over intellectual property rights, digital trade issues, agricultural tariffs, or subsidies.

The think tank also raises concerns regarding the discussions about regulatory ease for US corporations, citing national security and potential impacts on Indian businesses. Following India’s efforts to mitigate US tariff concerns by cutting duties on certain imports, the GTRI notes that the US has not recognized these tariff reductions.

Regarding the BTA negotiations, GTRI highlights the potential flaws due to the absence of Fast Track Trade Authority (FTAA) in the US, which would typically expedite and simplify trade agreements. The lack of FTAA leaves any agreement vulnerable to Congressional amendments, leading to possible future modifications of the terms.

Moreover, GTRI warns that the US employs a one-sided certification process that could pressurize partner countries post-agreement. This uncertainty poses risks where the US could later impose additional demands or alter the terms, making vigilance essential during negotiations to avoid legal imbalances in trade commitments.

India must strategically focus on industrial goods tariffs in upcoming trade negotiations with the US, emphasizing tariff elimination in line with US actions. It should avoid distractions related to sensitive topics such as intellectual property and digital trade. Given the absence of Fast Track Trade Authority, India must remain cautious about potential uncertainties and legislative changes that could affect trade agreements, necessitating thorough diplomacy to protect its interests.

Original Source: www.business-standard.com