India-US Trade Deal May Face Delays As Stalemate In Auto, Steel, and Agriculture Persists

New Delhi: India-US trade deal may face delays due to a persisting stalemate in the auto, steel, and agriculture sectors, sources said.

This development follows reports that the two nations may first sign a mini trade pact, with a comprehensive Foreign Trade Agreement (FTA) expected later, likely during US President Donald Trump’s anticipated visit to India in September for Quad Summit.

As a stalemate continues in a couple of sectors between the two nations during negotiations, reports suggests that India is planning to impose retaliatory tariffs on US cars or auto industry as Trump administration threatens to impose a 25 per cent reciprocal trade tax.       

The delay in finalising the trade agreement suggests that India is unwilling to accept terms imposed by Donald Trump's administration under pressure to hastily sign a Foreign Trade Agreement (FTA).

Indian trade negotiators back from United States 

In another development, an Indian delegation which was negotiating Donald Trump's tariffs and finalise terms for a trade pact with United States, have returned back to the country, signalling that a Foreign Trade Agreement (FTA) may face some more delays.

What Donald Trump announced on April 2?

On April 2, US President Donald Trump announced reciprocal tariffs on 133 partner trading countries including India, China, Europe, Australia, New Zealand, the UAE, and Pakistan, among others. The Trump administration set a 10 percent baseline tax for all nations, while imposing a discounted tariff of 26 percent on India.

Donald Trump halts reciprocal tariffs for 3 months 

After several countries retaliated to Donald Trump's retaliatory tariffs, the US President was forced to pause the trade tax for 3 months. During this time period, the Trump administration entered into negotiations with partner trading nations including India, to formalise a Foreign Trade Agreement and find a way which is mutually acceptable to all the stakeholders.