India will ‘talk tough’ with US on agri, relax tariffs on others
The triumvirate of Commerce ministry’s secretary-level officer Rajesh Aggarwal, Foreign secretary Vikram Misri and India’s ambassador to the US Vinay Kwatra is said to be exploring ways on how best to alleviate the concerns of US officials, so that both sides can “arrive at a win-win situation,” the source said.
As $5.4 trillion is wiped from the US economy in the bloodbath over two trading sessions and China strikes back by imposing a 34 per cent return tariff on US goods, India’s aim is to demonstrate an unshakeable resolve to protect its farmers, but at the same time agree to significantly reduce tariffs in the auto industry, for example, which are in any case beyond the ken of most people.“If India opens up to the US auto industry, it is unlikely that Indian consumers are still going to buy American cars that are significantly more expensive than either the Maruti or cheaper Korean and Japanese cars,” a source involved in the India-US negotiations told The Tribune.
“A fair, equitable and balanced deal is what we are working for,” a highly placed government official official said.
In order to alleviate Trump’s concerns that India is “very, very tough” on its negotiations, the government officials said India would be willing to buy more oil and gas from the US, as well as machinery and medical equipment.
This larger negotiation would define the ongoing Bilateral Trade Negotiations (BTA), which is expected to be finalised towards the end of the year.
Compared to US-China trade, where the deficit against the US is $295 billion, the trade deficit on the India account is only $45 billion in India’s favour.
India’s strategy, the officials confirmed, is to engage openly, demonstrate constantly that it is willing to reduce the deficit by expanding its purchases in other parts of the US economy and open up areas, like the civil nuclear sector, at home.
However, in the interest of maintaining food security, India is willing to be guided by the policy of protectionism, the official said.
India, which treats the agricultural sector as sensitive, has followed a policy of zero to 150 % tariffs on farm imports in order to firewall it from outside pressure. For decades, officials have argued that the rural economy sustains over 70 crore people, some of them living hand-to-mouth, and there can be no further diminution of their status.
The sources said India is fully able and ready to answer US Commerce Secretary Howard Lutnick’s recently question, “Why won’t India buy even a single bushel of American corn?”
“Our answer is,” the source said, “that we need to protect our people, especially in the rural economy. We can discuss everything else,” he added.
Agricultural items only constitute a minor share of India’s $87 billion exports to the US, only $4.4 billion. The remainder comprises the non-agricultural sector, of which $9 billion worth of goods from the generic pharma industry are exempt.
The government officials said India is willing to both lower tariffs in the non-generic pharma sector as well as in the non-agri segment of its exports to the US.
“Everything is off the table. Nothing is off the table. We will work on a fair and respectable deal," the senior government official said.
Official sources said they were confident that both sides already understand each other better.
“India is the only country which the US negotiators visited in the run up to Trump’s tariff announcement. Our competitors have been far worse hit which places our exporters at an advantage over them,” the official added.BoxWilling to lower non-generic pharma tariff
India