Piyush Goyal rejects report that India is holding out on US trade deal

Union Commerce Minister Piyush Goyal on Monday rejected a Reuters report that India declined a quick trade agreement with the United States during talks in June and is holding out for a better deal.

In a social media post, Goyal described the report, published on Monday, as “completely false, baseless and misleading”.

Referring to US Trade Representative Jamieson Greer’s June visit to Delhi, Goyal said that he had “fantastic meetings” with the official.

“Both sides reaffirmed their commitment to an agreement that is balanced, commercially meaningful, and delivers tangible benefits for businesses, farmers, workers and consumers in both countries,” Goyal said. “Our teams remain fully engaged in achieving this objective.”

The delay in signing the deal comes as the Narendra Modi government was drawing “confidence from new trading partners, easing economic risks and political gains at home”, Reuters had quoted unidentified officials and analysts as saying.

Reuters had also quoted an unidentified Indian government official as saying India and the US failed to finalise an interim trade agreement during Greer’s visit as Washington did not assure New Delhi on its key demands. The demands included a tariff advantage over competitors such as China and a commitment that the US will not impose fresh levies after the agreement.

“Our position is clear,” the news agency quoted the official as saying. “We don’t intend to rush into a deal that is not on favourable terms or compromise on red ​lines like ceding ground on agriculture.”

The report also mentioned remarks made by Goyal on June 25.

Speaking at the India Global Forum in London, Goyal had said that the agreement had already been agreed to by both sides in February, but its implementation depends on finalising a “competitive advantage” for India compared with countries such as Vietnam, Thailand, the Philippines, Indonesia, Malaysia, China, Bangladesh and Sri Lanka.

The minister had said at the time that the negotiations between the two countries had centred on reducing tariffs to 18% from 50%, which he described as creating an advantage for India over several competing economies.

He had added that with changes in the US tariff system following a US Supreme Court ruling and the introduction of a temporary 10% tariff that expires on July 24, further work was needed before the bilateral agreement could be implemented.

A US official told Reuters on Monday that Washington is still engaging with India to finalise an agreement, but did not offer a timeline. The news agency quoted the official as claiming that New Delhi had at times been “slow, bureaucratic and difficult” during the talks.

Trade deal uncertainty

After an interim bilateral trade deal was agreed on February 2, US tariffs on Indian goods would have been reduced to 18% from a combined rate of 50%. The earlier rate of 50% had included a punitive levy of 25% imposed in August over India’s purchase of Russian oil.

However, negotiations on the final deal were postponed after the US Supreme Court on February 20 struck down global tariffs imposed by President Donald Trump, ruling that he had exceeded his authority.

In response, Trump imposed a temporary 10% tariff on goods imported into the US, citing his authority under the 1974 Trade Act. The new tariff rate is for a maximum of 150 days, unless the US Congress approves an extension.

On February 21, the US president said that he was increasing the tariffs to the “fully allowed, and legally tested” level of 15% from 10% with immediate effect. However, it is unclear as to when the increased tariff rate would take effect.

This has left the status of US’ trade deals with countries, including India, unclear.

Written by Anamika Pathak. Edited by Nachiket Deuskar.

Also read: Why the India-US bilateral trade deal is on hold