India is pushing for a trade agreement with the United States that would give it a competitive tariff advantage over other Asian economies, as top U.S. trade official Jamieson Greer prepares to visit New Delhi for two-day talks starting Tuesday. The negotiations come amid strained diplomatic ties and a looming deadline on temporary U.S. tariffs.
The push for a favorable deal
Trade Minister Piyush Goyal said Monday that India wants to secure a comparative advantage over regional peers, including ASEAN nations like Vietnam. "We are trying to work out with the U.S. how they will ensure that we will get a comparative advantage, so that our exporters can benefit," Goyal stated. He expressed hope for a deal before July 24, when Washington's temporary 10% tariff on trading partners expires, adding, "The faster, the better."
A preliminary agreement was reached in February, setting an 18% tariff on Indian goods in exchange for New Delhi lowering trade barriers and increasing purchases of American products. That rate was lower than tariffs imposed on competitors like Bangladesh and Vietnam. However, the deal was delayed after the U.S. Supreme Court invalidated President Donald Trump's sweeping global tariffs.
Lingering tensions and uncertainties
Greer's visit follows the first meeting in over a year between Prime Minister Narendra Modi and President Trump on June 17 at the G7 summit in France. Diplomatic strains have been compounded by the death of three Indian sailors in attacks on commercial ships by the U.S. Navy in the Gulf.
Uncertainty also persists over a continuing U.S. Section 301 probe into alleged overcapacity and forced labor, which analysts say Washington is using to press India to open its agricultural markets and buy more American energy and defense products. A government official said India will seek assurances that no new tariffs will be imposed after the deal, and is wary of further tariff threats if talks stall. Greer's office stated that the talks aim to achieve "fair, balanced, and reciprocal trade."