India has outlined key demands in its ongoing trade negotiations with the United States, including preferential tariff treatment and safeguards against future tariff increases, as the two countries work to finalize an interim trade agreement, a trade official said on Monday.The Indian trade official said the proposed bilateral trade agreement between India and the United States may be finalized only after Washington concludes its investigations under Section 301 that alleged unfair trade practices, including concerns about forced labor and industrial overcapacity in sectors such as textiles. This revolves around the Office of the United States Trade Representative (USTR) listing India among the countries it believes are following unfair trade practices, and has proposed additional tariffs of 10 to 12.5 per cent on imports.
India is also seeking clarification on proposed US tariff measures arising from these investigations, which Washington says are aimed at addressing practices it considers harmful to US industry. New Delhi is also seeking assurances that any deal will protect it from future additional tariff measures by the US, the official added. “Once we get this tariff, we can finalize a trade agreement with the United States. But obviously the price has to be competitive with direct competitors,” the official, who spoke on condition of anonymity, told Reuters.
This comes amid efforts by New Delhi and Washington to conclude the first tranche of a bilateral trade agreement, which Commerce and Industry Minister Piyush Goyal said last week could be finalized by mid-July.India and the United States reached a preliminary understanding on a trade agreement in February. However, negotiations slowed after the US Supreme Court invalidated sweeping tariff measures imposed by US President Donald Trump.According to the official, the United States has since proposed imposing an additional 12.5% tariff on imports from India and several other countries due to concerns about the use of forced labor. Washington is also considering imposing separate tariffs on Indian exports, citing excess capacity in industries such as textiles and claiming that Indian shipments negatively impact domestic American manufacturers.Bilateral trade talks gained momentum last week when a US delegation led by Assistant US Trade Representative for South and Central Asia Brendan Lynch held three-day discussions with Indian trade officials in New Delhi.