A two-way trade deal under negotiation between India and the United States can be finalised after the conclusion of Section 301 unfair trade practices investigations by Washington, an Indian trade official said on Monday.
India would seek an assurance from the US that it will not be subjected to additional tariffs in future after the deal, the official said.
The conclusion of the probe is important as the temporary 10 per cent additional tariffs imposed by the US will end on July 24. After that, only the MFN (most favoured nation) tariffs will apply on the USA's trading partners.
"So if the US want us to pay any additional tax...they have to finish the Section 301 process before that," the official said.
This came after the Trump administration recently proposed 12.5 per cent tariffs on India and 53 other countries after a United States Trade Representative (USTR) investigation under Section 301 of the US Trade Act of 1974 concluded that these countries did not impose a legal prohibition on the import of goods produced wholly or partly through forced labour.
India is seeking lower tariffs than its competitors, like members of Asean (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam), as well as Sri Lanka and Bangladesh.
Last week, commerce and industry minister Piyush Goyal said that India and the US are moving towards closing all the open ends of the interim trade agreement, and both sides are likely to execute the "very, very vibrant" first phase of the pact by the middle of July.
The US team was here from June 2-4 for finalisation of the deal. They held discussions with the Indian team.
A high-level team is expected to visit India towards the end of this month. The team is likely to be led by US Trade Representative Jamieson Greer.
Earlier, on June 5, Goyal had expressed confidence that India and the United States were moving swiftly towards finalising the first tranche of the bilateral trade agreement.
Speaking to reporters after the National Workshop on Seafood Exports in Visakhapatnam, Andhra Pradesh, Goyal said discussions held in New Delhi between June 2 and June 4 had been productive.
“We had excellent discussions from the 2nd to the 4th of this month," Goyal said.
“We had a full team of officials from different divisions of trade from the USA in Delhi. I also met with them yesterday, and we are fast-moving towards closing all the open ends, and I think by sometime by the middle of next month or so we should be in a position to execute a very, very vibrant first tranche," he added.
The minister said the proposed agreement would provide Indian exporters with advantages over competing countries.
“It is only the first tranche of our bilateral trade agreement, which will give preferential access to India over our competitors," he said.
Goyal also indicated that another senior American delegation could visit India later this month as both sides work to finalise pending issues.