US asks India to cut duty on agri imports by 35%

The US asked New Delhi to slash average applied tariffs on American agriculture imports to 5% from the existing level of about 40%, with this likely to be one of the key issues of the four-day long trade deliberations set to start in Washington on Monday, people in the know said.

- Rajeev Jayaswal

The US wants parity in the average applied tariff for a mutually beneficial and long-lasting bilateral trade relationship, the people added, requesting anonymity. But accepting the US demand is difficult for New Delhi because Indian farmers, operating at the subsistence level, cannot withstand an unequal competition with American commercial farms, they said.

"While a bilateral trade deal should be based on reciprocity, it must also be based on the principle of equity for mutual gains and endurance," one person said. Washington officially maintains that India's average applied tariff rate on agricultural products is as high as 39% while its average applied rate on such items is only 5%.

Agriculture remains one of the most crucial sticking points in the India-US initial deal.