India-US trade deal hinges on preferential tariff advantage over rivals, says Goyal

New Delhi: India will finalise its proposed trade deal with the US once Washington gives New Delhi a preferential tariff advantage over competing economies, commerce and industry minister Piyush Goyal said Thursday.

"As soon as the US is able to give us the preferential rate in comparison to our competition, we will finalise the BTA (bilateral trade agreement) and announce the final details," Goyal said at an outreach programme on India's trade deals.

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Separately, at the 66th SIAM Annual Convention, Goyal said not a single Indian sensitivity had been compromised in the proposed BTA, adding that the interests of farmers, fishermen, MSMEs, workers, handloom and handicraft sectors and the auto industry had been protected.

"The details of the US deal isn't out yet so some people are trying to spread total falsehood. I can state with authority that not a single sensitivity of India has been compromised in the US BTA," he said, adding that the current agreement is an interim pact and India will continue to engage with Washington.

India's exports were $317 billion between April and July, around $36-37 billion higher than the corresponding period last year, and shipments in August also appeared to be on course, Goyal said at the National Workshop on Leveraging free trade agreements (FTA) Outreach Programme.

The minister would visit the US late September to attend the G20 Trade Ministerial and hold bilateral talks with USTR Jamieson Greer. Trade pact issues are expected to figure in the discussions.

New Delhi will conclude more trade pacts in the coming months or years with Canada, Mexico, Israel, Chile, Mercosur, the Southern African Customs Union, and the Gulf Cooperation Council, and review with ASEAN, Korea and Japan or "take other steps to secure greater market access", he said. This would give India access to 75% of global trade at a rate lower than that of its competitors, he added.

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The trading patterns of the US and EU were different, with entirely different costs of operation and labour costs. India therefore had to assess the rates paid by competing countries such as Vietnam and Bangladesh in other markets, Goyal said, adding that India's tariff rates under trade agreements would have to be either better than those available to competitors or reduced to zero.

Goyal said India had secured a good deal in all nine FTAs and every agreement was a win-win for both sides.

At the same event, commerce secretary Rajesh Agarwal said exporters should take advantage of these deals but cautioned: "We need to keep in mind that the window of opportunity that is opening before us through this FTA is not for an infinite period of time."

He said India's competitors, at some point in time, will also do trade pacts and get similar benefits in that market.