India Pursues Three-Phase Trade Agreement with the US Amid Donald Trump’s Influence
India and the United States are making strides in trade negotiations, with discussions focused on a phased trade agreement. Commerce Minister Piyush Goyal is currently in Washington for a four-day visit aimed at advancing these talks. The goal is to finalize an initial trade deal before July, coinciding with the implementation of new tariffs by the U.S. administration. As negotiations continue, both countries are navigating complex issues surrounding market access and tariff reductions.
Phased Approach to Trade Agreement
The proposed trade deal between India and the U.S. is expected to unfold in three distinct phases. The first phase aims to enhance market access for industrial goods and select agricultural products. Additionally, it will address non-tariff barriers, such as quality control specifications. Sources indicate that this initial phase is crucial for setting the groundwork for future negotiations.
The second phase, anticipated to take place between September and November, is expected to be more comprehensive. Indian officials have noted that this phase will cover 19 specific areas outlined in the terms of reference established in April. The timing of this phase may align with U.S. President Donald Trump’s visit to India for the Quad leaders’ summit, which could provide a significant boost to the negotiations.
The final phase of the agreement is projected to materialize next year, contingent upon approval from the U.S. Congress. This structured approach aims to facilitate a smoother negotiation process and ensure that both nations can reap mutual benefits from the agreement.
Current Negotiation Status
Commerce Minister Piyush Goyal’s visit to Washington is a pivotal moment in the ongoing trade discussions. Meetings with U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick are expected to yield progress on key issues. Despite some recent tensions, Indian authorities remain optimistic about the negotiations. They emphasize that discussions are advancing, and both sides are committed to finding common ground.
The Indian government has adopted a firmer stance in negotiations, recently warning of potential reciprocal duties on U.S. products if an agreement is not reached. This assertiveness reflects India’s determination to secure favorable terms in the trade deal. Meanwhile, President Trump has downplayed the urgency of finalizing the agreement, suggesting that India has proposed eliminating tariffs on U.S. goods entirely.
Historical Context and Future Prospects
The current trade discussions follow Prime Minister Narendra Modi’s visit to the White House in February, shortly after Trump’s inauguration. India was among the first countries to initiate trade talks with the U.S., reflecting a commitment from both leaders to strengthen bilateral trade relations. The goal has been to finalize the initial portion of the agreement by autumn this year, with Indian officials expressing confidence in achieving swift mutual benefits before the deadline.
As negotiations progress, the potential for a successful trade agreement remains high. Both nations recognize the importance of enhancing economic ties, and the phased approach may provide a framework for addressing complex trade issues. The outcome of these discussions could significantly impact trade dynamics between India and the U.S., paving the way for a more robust economic partnership in the future.
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