Very close on trade deal with US; competitive tariff advantage important for India: Goyal

Commerce and Industry Minister Piyush Goyal on Thursday said that the trade pact with the US is “very close”, but it cannot come into force unless India secures a competitive tariff advantage over its competitor nations.

“The day that happens, the deal is on,” he said here at the India Global Forum (IGF) UK-India Week event.

Goyal is here on a three-day official visit to discuss issues related to the implementation of the India-UK free trade agreement.

The minister held two-day talks with US Trade Representative Jamieson Greer in New Delhi this week on the first phase of the India-US bilateral trade agreement (BTA).

However, a statement by the commerce ministry gave no indication that all differences were resolved ahead of the expiry of 10 per cent temporary tariff on July 24.

A free trade agreement is fundamentally aimed at providing a comparative advantage over competitor countries in terms of market access, he said.

“And until the framework of getting that competitive advantage can be finalised, we can’t enter into force a US deal. I don’t think I can be more transparent than that...So that’s broadly the discussions (between India and the US) on how the US will find the appropriate tools and legal backing to give us that competitive advantage over our competitors,” he added.

When the framework of the first phase of the BTA was finalised, India had a comparative advantage over its competitor countries, such as ASEAN nations (Indonesia, Malaysia, Singapore, Thailand, Philippines, Brunei, Vietnam, Laos, Myanmar, Cambodia), Sri Lanka, Pakistan and Bangladesh.

Under the framework, the US had announced an 18 per cent tariff on Indian goods. At that time, tariffs on India’s competing countries ranged from 19 to 20 per cent. But now, all countries face the same 10 per cent additional levy.

“There is always a little give and take (in an agreement),” he said, adding, “We are very close” to the deal.

Suggesting that the India-United States trade deal was 99 per cent complete, US Ambassador Sergio Gor, on June 3 in Mumbai, said that both sides were trying to resolve the remaining “1 per cent” sticking points and expected the long-awaited pact to be inked within the next several weeks.