U.S. Urges India for Comprehensive Trade Deal Over Tariff Negotiations
U.S. Commerce Secretary Howard Lutnick urged India to pursue a broad free-trade agreement to lower tariffs comprehensively rather than on a product-by-product basis. He emphasized reevaluating bilateral trade relations due to India’s high tariffs. Lutnick also advocated for open discussions on all sectors, including agriculture, and recognized the strong relationship between Modi and Trump as beneficial for negotiations.
On March 29, 2023, United States Secretary of Commerce Howard Lutnick expressed that the Trump administration is advocating for a comprehensive free-trade agreement (FTA) with India. Instead of negotiating deals on a product-by-product basis, which may span several years, Lutnick emphasized the need for a broad-based agreement to lower tariffs across the board. He stated, “Let’s bring India’s tariff policy towards America down, and America will invite India in to have really an extraordinary opportunity and relationship with us,” during the India Today Conclave.
Lutnick’s remarks followed a meeting with India’s Commerce and Industry Minister Piyush Goyal, who previously visited Washington from March 4-6. As reciprocal tariffs from the US are set to take effect on April 2, India is seeking a delay in these tariffs. Nonetheless, Lutnick noted that India’s high tariffs necessitate a reevaluation of the bilateral relationship between India and the US.
He mentioned, “How you treat us is how we would like to treat you … India has some of the highest tariffs in the world, and that will require a rethinking of the relationship, the special relationship, between India and the US.” Lutnick posited that any potential agreement could benefit from the strong rapport between Prime Minister Narendra Modi and President Trump.
Moreover, Lutnick highlighted the necessity to consider all sectors in trade discussions, including India’s agriculture market, which has been deemed off-limits in negotiations. He stated, “You can’t just say, oh, it’s off the table. That’s just not an attractive way of doing business.” He further articulated the importance of an open dialogue to craft a thoughtful and strategic trade agreement.
Trump characterized the current tariffs as “temporary” but emphasized that soon-to-be-imposed reciprocal tariffs would significantly alter trade dynamics. Lutnick argued against the idea that tariffs lead to inflation, attributing price increases to deficits and excessive money printing instead. He underscored the disparity in tariff rates, noting that India imposes a 9.5 percent average tariff on US exports while the US maintains a 3 percent tariff on Indian imports.
In summary, Secretary Lutnick advocates for a sweeping trade agreement between the United States and India that emphasizes reducing tariffs broadly rather than through piecemeal negotiations. He insists that India’s high tariffs necessitate reevaluation of the bilateral relationship and calls for an open dialogue in trade discussions. The objective is to forge a more equitable trade relationship, benefitting both nations, particularly ahead of impending reciprocal tariffs.
Original Source: www.business-standard.com