US President Donald Trump meets with Indian Prime Minister Narendra Modi at the White House in Washington, DC, US, February 13, 2025
| Photo Credit:
KEVIN LAMARQUE
The 90-day respite from reciprocal tariffs extended by US President Donald Trump to most countries on Wednesday has given more time to India to negotiate a bilateral trade agreement (BTA) with the US but the pressure is certainly not off the Indian negotiating team as their American counterparts are expected to bargain hard.
The US will not just push for slashing of tariffs but is likely to insist on putting a whole lot of non-tariff issues such as IPR, government procurement, digital trade, data localisation and prices of medical equipment on the negotiating table, experts say.
“It is very clear that Trump and his advisers want to use the reciprocal tariffs, and now their postponement, as a lever to yank more benefits from trade partners. Trump is a deal maker. He says, okay I give you 90 days within which you come back and tell me what you will do for me. I think behind the border issues will be in good measure in the BTA with India,” said Biswajit Dhar, Distinguished Professor, Council for Social Development.
On April 2, Trump announced sweeping reciprocal tariffs on most of America’s trade partners – 10 per cent baseline tariff on all from April 5 and country-specific tariffs from April 9. Trump said these tariffs were to counter the higher tariffs on American goods but actually corresponded with trade deficit.
China in the crosshairs
On April 9, Trump announced a 90-day pause on the country-specific reciprocal tariffs on all countries except China, which was slapped with tariffs of 125 per cent while Beijing also imposed counter tariffs on the US.
Trump said that more than 75 countries have called representatives of the US to negotiate a solution to the subjects being discussed relative to trade, trade barriers, tariffs, currency manipulation, and non-monetary tariffs, making it clear that his negotiators would go much beyond tariffs.
The postponement of the reciprocal tariffs would not add up to much in the long term, said Abhijit Das, expert on international trade. “It is a temporary relief at best. We need to be cognisant of demands that US might make on government procurement, IPR, digital trade etc,” Das said.
Although India started negotiating a BTA with the US last month before any other country, now several other Asian competitors such as Vietnam, Indonesia and Thailand have expressed keen interest in doing so.
Striking a deal
Top officials from the US Trade Representative’s office that visited New Delhi in March talked not just about brining tariffs down but put all issues that the US has been pushing for long on the table.
In a recent report, research body Global Trade and Research Initiative strongly advised against a broad trade agreement with the US. “First, a comprehensive trade deal would open the door to US demands, not just on tariff reductions, but also on government procurement, agricultural subsidies, patent laws, and unrestricted data flows—all of which India has consistently opposed,” it said.
The US is pushing for slashing of tariffs on a range of goods such as automobiles, motor cycles, agricultural items, medical equipment and alcohol. The GTRI suggested that India should be firm and draw the line in sensitive areas such as agriculture and dairy.
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Published on April 10, 2025
