India wants clarity on a US excess capacity probe and tariff safeguards before finalising an India-US interim trade pact
The outcome of the US mid-term elections is unlikely to accelerate the conclusion of the proposed India-US interim trade agreement, as President Donald Trump retains executive powers to impose tariffs and New Delhi wants greater clarity on Washington’s investigation into excess industrial capacity before finalising its tariff commitments, sources said.
A source told businessline that India needs to assess how the ongoing US investigation under Section 301 will affect its own exports and those of competitors such as Bangladesh, Vietnam and Cambodia. New Delhi wants to ensure Indian exporters do not face higher duties than their competitors.
The Democratic Party won both chambers of the US Congress on November 3, which could increase scrutiny of the administration’s trade policies. India also wants safeguards against the US using its sanctions law on Russia to impose punitive duties, including a provision allowing counter duties.
The pact had been expected to give Indian exporters a reciprocal tariff rate of 18 per cent, but the US Supreme Court’s February 20 ruling invalidating IEEPA tariffs altered the landscape. The core issue of tariffs remains undecided.
Source: The Hindu Businessline
