India Plans Duty Cuts as Part of Early Harvest Deal With US

India is planning to lay out a road map for duty cuts on certain American imports when a US trade team arrives for discussions next week, people aware of the developments said on Friday, outlining a plan by which New Delhi hopes to avert the retaliatory tariffs that US President Donald Trump has said will be imposed on April 2.

- Rajeev Jayaswal

NEW DELHI:

The proposals are likely to be part of what is regarded as an early harvest deal, said the people who spoke on condition of anonymity, and could be presented to the US negotiating team visiting Delhi next week.

The officials outlined specific multilateral legal obligations that will need to be worked around, as reported by HT on March 21. The World Trade Organisation (WTO) trade framework prohibits any member from reducing tariffs for one country without extending the same benefit to other members, except through a free trade agreement (FTA).

Since a comprehensive FTA could take months to negotiate, "the only way is to immediately commit to a bilateral trade agreement, including tariff reduction on identified items under an early harvest deal," one of these people said. "It is expected that this matter could be discussed between the negotiating teams of the two countries meeting face-to-face for the first time in New Delhi next week," this person added, declining to provide specific details of the proposed meeting.

Some of the American imports that this early harvest deal could cover include motorcycles, four-wheelers, fossil fuels and some farm produce such as pulses, though the specifics are being worked on.

To be sure, there's no certainty that these cuts will help India avoid the retaliatory (or reciprocal) tariffs. Negotiators from both countries have been engaged in virtual discussions since early March, preparing for the first in-person meeting expected to be led by assistant US Trade Representative Brendan Lynch. Lynch is described as "a veteran trade negotiator handling affairs of the South and Central Asian region for over a decade."