India, US Negotiate Interim Trade Deal With Binding Terms

India and the US are negotiating an interim deal within the legally binding framework of a bilateral trade agreement (BTA) unlike the non-binding nature of the recently concluded US-UK Economic Prosperity Deal (EPD), hence New Delhi wants Washington to simultaneously withdraw all punitive tariffs, including the 26% retaliatory levies, people in the know said.

- Rajeev Jayaswal

NEW DELHI:

The two partners are intensely engaged in finalising an early harvest deal before July 9 that primarily involves tariff and non-tariff matters as per mutually agreed terms of reference (TORs) in March 2025. The TORs reinforce the binding nature of the deal that will eventually culminate into a comprehensive free trade agreement or BTA, they said, requesting anonymity.

American negotiators have been suggesting India replicate the US-UK EPD model, where Britain on May 8 accepted continued 10% baseline tariffs on most goods while securing relief from additional sectoral tariffs. The deal is, however, not legally binding in contrast to the proposed India-US BTA. India is willing to slash tariffs on over 90% of US imports, but it wants Washington to simultaneously repeal the 10% baseline tariff imposed on Indian products from April 5, withdraw the threat to levy another 16% country-specific duty (total 26%) from July 9, and revoke safeguard duties on steel, aluminum, automobiles and components.