New Delhi
India and the US have agreed to “remain engaged” after three-day trade talks that ended on Wednesday in Washington, a commerce ministry statement said – indicating that the Trump administration is awaiting the establishment of a legally sustainable tariff framework to finalize an interim bilateral agreement after the US Supreme Court struck down the basis for reciprocal tariffs in February.
The Indian delegation, led by chief negotiator Darpan Jain, discussed a range of areas such as market access, non-tariff measures, technical barriers to trade, customs and trade facilitation, investment promotion, economic security alignment and digital trade, the ministry said on Friday. It said the meetings were held in a “constructive and positive spirit” with “meaningful and forward-looking discussions” that enabled progress on key matters.
This was the first face-to-face meeting since the two countries agreed to the framework of an interim agreement on February 7. “This framework reaffirmed the countries’ commitment to negotiate a comprehensive India-US bilateral trade agreement,” the ministry said. “Both sides agreed to remain engaged to maintain this momentum as we move forward.”
Days before the delegation’s departure, Commerce Secretary Rajesh Agarwal had said the two sides were considering finalizing a legal agreement as a logical follow-up to the February 7 joint statement. “Further discussion and follow-up engagement is needed to take this forward,” he said.
At a hearing before the House Ways and Means Committee on Tuesday, USTR Jamison Greer confirmed that Indian negotiators were in Washington and the two sides were actively discussing specific items including dry distillers grains, soybean meal and ethanol. He said, “India is hard to curb. They have protected their agricultural markets for a very long time. As part of this agreement, they still want to protect a lot of it. However there are some things where I think we can find mutual agreement.”
India’s Foreign Ministry spokesman Randhir Jaiswal said Thursday that the talks remained “ongoing and constructive.” “Both sides are working towards a balanced, mutually beneficial and forward-looking trade agreement, keeping in mind each other’s concerns and priorities and achieving the trade target of $500 billion by 2030,” he said. This target would more than double bilateral goods and services trade to approximately $212 billion in 2024.
The talks are progressing on two broad tracks: establishing a legally sustainable tariff architecture following the Supreme Court decision, and securing India’s comparative advantage over competing exporters such as China, Vietnam, Bangladesh, Sri Lanka and Indonesia. The uniform tariff currently imposed under Section 122 – applied equally to all countries – does not give India any edge over its rivals. “A flat tariff of 10% does not give India any comparative advantage,” a person familiar with the matter said.
The need to rebuild the agreement on solid legal ground has been the central challenge since the Supreme Court on February 20 struck down Trump’s sweeping global tariffs as exceeding their statutory authority – a judgment that invalidated the proposed 18% tariffs on Indian goods that were the cornerstone of the February 7 framework. The administration has since imposed a temporary 15% flat tariff on all imports under Section 122 of the Trade Act of 1974, which is valid for 150 days and is scheduled to expire in July. Washington has also initiated a Section 301 investigation into alleged excess industrial capacity against 16 economies, including India, which the ongoing talks are expected to help resolve.
