NEW DELHI: As govt begins its homework for the proposed trade deal with the US, it has indicated its willingness to engage in tariff reduction with Trump administration on a bilateral basis, arguing that with an “aggressive neighbourhood” in China duties cannot be lowered significantly for all trading partners, while hoping to get a good deal on services, as well as visas for businesses and professionals.
Amid repeated statements by US president Donald Trump on India’s “high tariffs”, sources asserted India’s average tariffs of around 17% (which has further come down) is well within its commitment at WTO to keep customs duty at around 50%.
Although the commerce department has started consultations with other govt ministries and departments, it is awaiting the Trump trade team to be in place and keeping a close watch on how the issue of reciprocal tariff plays out in the coming days and dismissed reports and estimates – including by leading global banks – as “speculation”.
Besides, officials from the commerce and revenue departments are also expected to assess the level of tariffs at the overall level and at the micro level as they formulate the negotiating strategy.
While govt has already lowered tariffs for bourbon whisky and bikes, a move that favours the iconic Harley Davidson, the US has pocketed the gains and is exerting pressure for further cuts. Officials are, however, keeping the cards close to the chest, fearing that the negotiating strategy would become public.
Besides, the final negotiating position will depend on how US proceeds with reciprocal tariffs, given that it is unclear whether it would be country-specific or goods-specific and if other parameters, such as non-tariff barriers, are brought into the picture. In any case, the assessment by the US commerce department is expected to be followed by an investigation, according to some accounts.