Parl panel for early conclusion of India-US trade pact, tariff exemptions on key goods

New Delhi: India should conclude the proposed Bilateral Trade Agreement (BTA) with the US at the earliest while ensuring that its interests are adequately protected, the Standing Committee on Commerce said Thursday, while recommending a review of the India-US trade relations in the interest of the country and its citizens as far as the US tariff hike is concerned. It said that to ensure that the agreement is effective, the government should negotiate for complete exemption for India’s key export products such as generic medicines, critical minerals and smartphones from any future unexpected US tariff increases.

The panel suggested the commerce department prepare a time-bound roadmap to achieve the objectives of the Mission 500 initiative by promoting trade in goods and services, encouraging investment, enhancing cooperation in critical technologies, improving supply chain and addressing both tariff and non-tariff barriers faced by Indian exporters and prepare a long-term strategy to increase India's share in the American market. The two countries aim to more than double total bilateral trade to $500 billion by 2030.

“The committee recommends that the government conclude the proposed BTA at the earliest while ensuring that India's interests are adequately protected,” it said, adding that the move would benefit businesses in both countries as it would provide a stable and predictable trade environment.


Highlighting that the pact should focus on reducing tariffs on engineering goods, auto components and other products related to the automotive sector as the removal of additional US tariffs on Indian exporters will improve India's competitiveness, it suggested protection to vulnerable small-scale industries from volatile tariff actions and localised financial buffers and export credit assistance programmes. It also asked for the setting up of a special, fast-acting watch desk to track US customs audits in real time for Indian exporters to get instant warnings about any new import rules.Further, the committee is of the :considered view that the Department should focus on diversification of export products, integration with global value chains, development of sustain supply chains, promotion of value-added manufacturing, and timely conclusion of the proposed BTA".

While recommending extension of quick technical and financial support to small businesses to upgrade their paperwork so that shipments do not get stuck or delayed at US borders, it said the department should closely monitor developments affecting India’s trade and commerce, including tariff measures and non-tariff barriers in the US and timely policy support be provided to sectors that face adverse impact due to tariff measures so that export growth is not impacted.

"Concurrently, priority must be given to fast-tracking Mutual Recognition Agreements (MRAs) for professional services, pharmaceuticals and agricultural standards to prevent arbitrary technical barriers to trade at US ports. The Committee further suggests establishing an institutional mechanism to routinely review currency volatilities and logistics challenges is imperative to cushion MSME-led export sectors from sudden regulatory shifts," it said.

The committee also suggested formulation of a targeted strategy to boost high-value knowledge exports such as artificial intelligence, digital health and engineering research to maintain India's long-term competitive edge in services.