Ministry Consults Industry on US Trade

India's commerce ministry convened a meeting on September 1 with industry associations and export promotion councils to review India-US trade performance and discuss recent developments in bilateral trade, an official said. The meeting, chaired by Additional Secretary Darpan Jain, who also serves as the country's chief negotiator for the India-US bilateral trade agreement, focused on recent trade trends and sector-wise performance.

The discussions come ahead of Commerce and Industry Minister Piyush Goyal's planned visit to the US later this month. Goyal is expected to attend the G20 Trade Ministerial in Milwaukee, beginning September 30, and hold bilateral talks with US Trade Representative Jamieson Greer. He is also likely to lead a business delegation to Chicago after the ministerial.

The ministry asked industry and exporters to share their concerns regarding access to the US market so that the issues can be taken up with their American counterparts, according to an official. Some exporters urged the ministry to conclude the trade pact with the US at the earliest to reduce uncertainties on the tariff front.

Exporters Report Order Reductions

An exporter said order books from the US are good, but order volume has reduced. Due to prevailing tariff uncertainties, US buyers are not placing big orders nor giving long-term orders, the exporter said, adding that American buyers are diversifying their sources of imports.

The industry also flagged concerns over safeguard measures imposed by the US on quartz surface products and urged the commerce ministry to take up the matter with American authorities.

Representatives of export promotion councils shared export data and discussed sector performance. Sectors represented included pharmaceuticals, engineering, textiles, agriculture, chemicals, marine products, leather, automobiles, auto components, handicrafts, and plastics. Industry chambers CII, FICCI, Assocham, and exporter body FIEO participated.

Trade Agreement Context

India and the US are negotiating a bilateral trade agreement. In February, both sides announced the finalisation of the framework for the first phase of the pact, but changes in the US tariff landscape have led to further negotiations, according to an official.

Goyal has recently said the first tranche of the trade agreement will come into operation once the US ensures that Indian exporters receive a comparative advantage over competing countries.

The US has imposed an additional 10% tariff on a number of countries, including India, from July 24. Countries including Sri Lanka, Bangladesh, Thailand, Cambodia, Vietnam, Indonesia, and Malaysia are major competitors of India in the US market.

Commerce Secretary Rajesh Agarwal said both sides are completely committed to move ahead and finalise the framework agreed in February. "Our sense is both sides are completely committed to move ahead and finalise the framework," he said.

India's exports also face an additional 10% duty under a Section 301 investigation in the US examining alleged forced labour, and the US Senate has passed a sanctions bill granting President Donald Trump authority to levy tariffs of up to 100% on goods exported by top buyers of Russian oil, including India. India's imports of crude from Russia have risen and accounted for more than half of the country's total oil imports during a period.

Outlook

The ministry's consultations with exporters are expected to provide an assessment of the impact of current tariff conditions and sector-specific concerns ahead of the next round of high-level India-US discussions, according to a report by IANS.