New Delhi: Any tariff relief for India in the near future seems unlikely as the scheduled visit of US trade negotiators to New Delhi for the sixth round of negotiations on a Bilateral Trade Agreement (BTA) has been called off.
The trade negotiations were halted from the US side, it has come to be known. However, it is not known as yet if the measure is permanent. The US has just informed that the negotiators will not be attending the August 25 meet.
The bilateral talks was to go on till August 30. The US delegation was to be headed by assistant US trade representative Brendan Lynch. It was expected that the meeting would help to resolve the sudden escalation of trade tensions after US president Donald Trump doubled the additional tariff (over MFN rates) on India to 50%.
The cancellation of the meeting means that the first tranche of the BTA which in its full fruition, is conceived to cover several other areas apart from goods trade, may not materialise before the fall of the year, as originally planned.
The initial 25% levy, which came into effect on August 7, is described by the US as “reciprocal tariff” meant to address trade imbalance with India. Another 25% rate is a punitive one for India’s “continued purchases” of Russian crude oil, and this is slated to come into force by August 27.
The Government of India had earlier called the punitive tariff “unfair and unreasonable,” with officials citing purchase of Russian goods by the EU, China and even the US itself.
In his recent Independence Day speech, Prime Minister Narendra Modi made it clear that the country would not accept any agreement that is detrimental to the interests of its farmers and cattle rearers. At the same time, India has never formally closed the avenue for dialogue, the most structured one being the negotiations for BTA.
India has made it clear that it will continue to purchase crude from Russia as it makes financial sense. Trump, however, told Fox News on Friday that: “he (Russian President Vladimir Putin) lost an oil client, so to speak, which is India, which was doing about 40% of the oil. China, as you know, is doing a lot…And if I did what’s called a secondary sanction, or a secondary tariff, it would be very devastating from their standpoint. If I have to do it, I’ll do it. Maybe I won’t have to do it.” Trump said on Friday.
According to the Financial Express, India imported 1.8 million barrels per day of Russian oil in the first fifteen days of August even as a 50% tariff by the US looms over the country. This is even higher than the purchase of 1.6 million barrels per day in the entire month of July.