India, US in 'regular contact' on trade deal, says commerce secretary Agrawal

New Delhi: India and the US remain engaged in talks to finalize their trade deal, with commerce secretary Rajesh Agrawal saying both sides remain committed to taking forward the framework agreed upon in February, even as Washington’s tariff actions and ongoing investigations add uncertainty.

“Our sense is both sides are completely committed to move ahead and finalise the framework that was agreed in February,” Agrawal said in a press briefing on Thursday in New Delhi, adding that the two countries remain in regular contact.

As per the latest available data, Indian exports to the US rose nearly 13% to $9.02 billion in July, while imports from the US grew faster, by 18.1%, to $5.5 billion.

Agrawal’s comments come as the US considers further tariff action linked to imports of Russian oil, while Washington is separately examining India’s trade practices under a Section 301 investigation into excess capacity.

Most Indian exports currently face an additional 10% duty linked to the US Section 301 forced-labour measure.

On the proposed US legislation targeting countries that continue to buy Russian oil, which could impose levies of up to 100%, Agrawal said the matter was still being considered through the US legislative process and declined to comment further.

The US Senate passed the sanctions bill last week, but it still faces consideration in the House.

The US measures are particularly significant for India given the country’s continued reliance on Russian crude.

Tariff cloud

On the US Section 301 investigation into excess capacity, Agrawal said India has already submitted its representations. The US is expected to issue draft recommendations, following which India will have another opportunity to respond.

“It is taking time on their end, but we are engaged with the US on this,” he said.

Asked whether the eventual trade agreement would include a provision preventing the US from imposing additional tariffs on Indian goods after an agreed tariff rate is set, Agrawal said predictability would be a key outcome of any trade pact.

“My sense is one of the key outcomes of any trade deal is to bring predictability of a trade relationship between two countries,” he said.

“Despite claims of 99% completion and “regular touch,” the India-US deal remains trapped in a deficit of TRUST: strategic understanding, technological reciprocity and Indo-Pacific convergence. Washington’s tariff-and-sanctions coercion has yielded little. With diversified FTA partnerships, India will negotiate only on mutuality, preferential reciprocity, inclusiveness and strategic respect,” said Ram Singh, professor and head, Indian Institute of Foreign Trade, New Delhi.

Commerce and industry minister Piyush Goyal has said the first tranche of the agreement will come into force only once the US ensures India gets a comparative tariff advantage over its export competitors, including Sri Lanka, Bangladesh, Thailand, Cambodia, Vietnam, Indonesia and Malaysia, all of whom compete with India in the American market.

The US has levied an additional 10% tariff on goods from India and several other countries since 24 July. A tariff edge over these competing exporters would significantly boost the price competitiveness of Indian goods in the US.