What India is hoping for on US deal: Up to 20% tariff differential vis-a-vis China rate

As the India-US trade talks enter their final decisive phase in Washington DC, policy makers here hope that three implicit assumptions of New Delhi materialise, the most important being a steady differential between the US tariffs on China and India.

- Ranga Reddy

Despite US President Donald Trump's vacillations on trade policy, the government is confident that the administration in Washington DC will maintain a differential of 10-20 per cent in tariffs between China and countries such as India.

“The deal needs to be clinched precisely for this gap to be maintained,” an official said. The official said the US is driving hard for market access in politically sensitive sectors such as agriculture and dairy, and there are strong red lines here. But a section of officials also reckon it is important to ensure a good differential between the US tariffs on India and China, for which a deal is vital. “The question is whether the Indian negotiators would have to settle for a limited earlyharvest type of deal, or would they have to turn away from the negotiations for now, let the July 9 deadline pass, and then rebuild efforts to bridge the gaps. A full-scale deal looks out of the question for now,” another official with experience of trade negotiations said.