Govt Sticks To 'India First' Approach In US Tariff Talks, But Open To Fair Rate Cuts
A source told CNN-News18 that India was ready for rate cut on some items of agricultural produce like walnuts, apple and almonds but no concessions are likely on wheat and maize
National Interest First is the buzzword when it comes to the US-India trade and tariff negotiations, even as the new tariff policy is set to come into effect in the United States on April 2.
However, sources say India has agreed to some rate cuts on selected items so that its interests can be protected. “But this does not mean that we are buckling under any kind of US pressure," a top government source told News18.
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“We are ready to cut on some items of agricultural produce like walnuts, apple and almonds. But keeping in mind the sensitivity of the agricultural sector in India, on many items like wheat and maize, no concessions are likely to be given," they said.
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The worry, however, is the automobile sector. US President Donald Trump has announced that 25 per cent tariff will be imposed on cars being imported to the United States. The White House, in a statement, said that the 25 per cent tariff will be applied to imported passenger vehicles such as sedans, SUVs, crossovers, minivans, cargo vans, and light trucks, as well as key automobile parts like engines, transmissions, powertrain parts, and electrical components. It added that the tariffs could be expanded to additional parts if necessary.
“This could affect India’s automobile industry significantly, but we are ready to slash some tariffs on bikes and smaller passenger cars. The bulwark has been created over the last few months in anticipation of tariff and thus, many sops and benefits have been announced for the Electric Vehicles sector which has seen some growth," sources said.
“GST rate cuts and cuts in customs duties give the government hope that these measures could protect our customers. This apart, Tesla has been given a level playing field as it is hoped that with increased competition, indigenous car manufacturers like Mahindra and Tata will up their performance and models."
Imposing tariffs on imported cars may also affect ties with countries such as Japan, South Korea, Canada, Mexico and Germany – close US partners.
There is also some cheer for those who love iconic American products like the Bourbon Whiskey as India has agreed to lower tariff off on the product. More such moves could follow.
Since his return to the White House in January this year, Trump has already imposed tariffs on imports from major trading partners of the US such as Canada, Mexico and China, as well as 25% duty on steel and aluminum imports.
Sources say the key objective is to decide the terms of reference and both sides will work on the Bilateral Trade Agreement (BTA) and timeline schedules as well.
The Indian government is hopeful, given that the US has made it clear it wants to positively engage with India. However, the government has made it clear that these are merely bilateral negotiations that apply to US and India. Other countries cannot expect similar concessions as India won’t buckle under any pressure.
Government sources added that India understands America’s domestic compulsion. “They need to get back those manufacturers who had left America for other countries, like say, China. Also, in negotiations, unlike others, America has sent its delegation here which shows US wants to actively engage with us. America cannot openly show that they are going soft on us so india expects things to be more positive after a few weeks."
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