New Delhi: The Government has informed the Parliamentary Standing Committee on External Affairs that India has not made any commitment to reduce tariffs on goods imported from the US.
In a briefing on the issue, Commerce Secretary Sunil Barthwal told the Parliamentary committee that negotiations between India and the US were still ongoing and that no trade agreement had been finalised.
The Commerce Secretary’s clarification came in the wake of US President Donald Trump’s statement that India has agreed to bring “way down” its tariffs on US goods.
Barthwal said, “One cannot go by the US President’s claims and on media reports as the bilateral trade agreement talks between the two nations are still on. India has not committed to anything on trade tariffs to the US”.
He also made it clear that India’s interests were of paramount importance and would be taken care of during the trade negotiations.
Barthwal said that India was in favour of increasing bilateral trade with the US but would not indiscriminately lower tariffs, especially in sectors crucial to its domestic economy.
“India prefers to negotiate tariff reductions bilaterally rather than multilaterally to ensure national interests are upheld,” Barthwal told the parliamentary committee
He also highlighted that India’s situation was different from that of Canada and Mexico as these two countries shared a border with the USA which involved security concerns.
Trump’s ‘America First’ policy has the potential to disrupt world trade as the US President has accused trading partners of unfair practices and threatened to impose punitive tariffs on a large scale. He has accused India of levying massive tariffs on US goods.
According to a Morgan Stanley report, India is the “best-placed country in Asia,” amid the global uncertainty triggered by US President Donald Trump’s threat to jack up tariffs, because of the nation’s low goods exports to GDP ratio and strong Government policy to support domestic demand.
“While India is exposed to direct tariff risks, we believe on balance India is less exposed to global goods trade slowdown considering that it has the lowest goods exports to GDP ratio in the region,” the report states.
According to the report, while India can eventually reach a trade deal with the US, it would be relatively more challenging given the multiple bilateral trade issues.
The report highlights that WTO’s most-favoured-nation principle also prevents India from adjusting its tariffs on US imports first without extending this to other WTO members unless this happens under a free-trade agreement.
Under the WTO agreements, countries cannot normally discriminate between their trading partners. Grant someone a special favour (such as a lower customs duty rate for one of their products) and you have to do the same for all other WTO members.
(IANS)
