US officials likely to visit India for next round of talks on the interim trade deal: Govt sources

In a fresh set of developments in the India-US trade talks, government sources have told CNBC-TV18 that American officials are likely to visit India for the next round of talks for a proposed interim trade deal in the coming weeks.

Sources added that with negotiations moving at a fast pace, an interim deal seems possible before the 1st tranche of the proposed bilateral trade agreement (BTA).

On 21st May, government officials indicated that India is aiming for full exemption from 26% additional tariffs in the interim trade deal being discussed with the United States, which is being aimed at before 9th July to avert applicability of reciprocal tariffs which are currently paused by the world’s largest economy.

Stating that goods and digital services are likely to be a part of an interim trade deal with the US, government officials had pointed out that the Trump administration doesn’t have the authority to bring tariffs lower than the MFN (most-favoured nation) rate, which will require approval from the US Congress.

However, the US government can remove reciprocal tariffs for several countries, including India. Attributing growth in exports to the US to benefits accrued from differential tariffs for Indian exporters, officials had said that Indian products don’t face the kind of non-tariff barriers (NTBs) in the US the way they face in the EU, adding that recent issues on exports of Indian mangoes have also been resolved.

While the import of genetically modified (GM) crops from the US continues to remain a non-starter due to regulatory norms in India, India remains open to importing non-GM produce like alfa-alfa hay. Officials explained that Indian law will need an explicit certification of non-GM alfa-alfa for being imported, which may pose issues for the US as GM and non-GM crops are often cultivated indistinguishably.

The US is also seeking concessions in certain industrial goods, automobiles, wines, petrochemical products, dairy, and other agricultural products.

Officials had said that India is also aiming for Minimum Import Price (MIP) or import quotas in sensitive sectors like dairy and agriculture as part of the deal, adding that India also wants 5% to 7% Basic Customs Duty (BCD) to be cut for its exports of labour-intensive products like leather.

India and the US are looking to double their bilateral trade to $500 billion by signing the 1st tranche of a mutually beneficial multi-sector bilateral trade agreement (BTA) by October 2025.