Hours after India and the UK signed a free trade agreement which both sides believe could deepen their economic engagement, commerce minister Piyush Goyal said he was optimistic about reaching an interim trade deal with the US ahead of an August 1 deadline to avert the threatened reciprocal tariffs of 26%.
“I’m always confident,” Goyal said in an interview to Bloomberg TV in London. “I’ve had some wonderful engagements with my friend and colleague from the US,” he said in an apparent reference to US commerce secretary Howard Lutnick.
India eyes interim pact ahead of tariff deadline
The minister’s statement boosts the prospects of an interim deal with Washington, ahead of the slated visit of a US team to India in the second half of August to carry forward the negotiations for the first tranche of the bilateral trade agreement (BTA). Sources here had earlier told FE that even as the visit of US negotiators for the six round of talks is scheduled, both sides would remain “engaged through (other) means on an interim arrangement that will enable New Delhi to avoid reciprocal tariffs”.
“We have very robust negotiations going on with several countries, including with the US, the EU, New Zealand, Peru, and Chile,” Goyal said, signalling once again the country’s resolve to boost its foreign trade via bilateral agreements with countries, especially the developed ones, while the multilateral system is stagnant.
Wider trade strategy
With regard to the recent thaw in relations between India and China, the minister didn’t provide any specifics, but said India would work with any country that plays by trade rules and gives equal market access to Indian goods and services. Earlier this week, India allowed tourist visas for Chinese nationals for the first time in a 2020 border clash.
The BTA process with the US began shortly after the announcement of near-universal reciprocal tariffs by the US in early April. These extra levies have since been put abeyance while leaving a 10% baseline duty, and as per the US latest stance, could well resume after August 1 for all countries, except a few with which it has struck deals, including Vietnam, Indonesia, Japan and Philippines. India could be the next in line to strike a similar deal.
US treasury secretary Scott Bessent has recently said that the Trump administration was more concerned about the quality of the trade agreements, and won’t “rush into anything”. Bessent stated that while negotiations were “moving along”, the emphasis was on high-standard outcomes rather than deadlines. “If we boomerang on August 1 tariffs, higher tariffs could put more pressure on countries,” he warned.
Lutnick said last Sunday that there would be no further postponement of the (August 1) deadline. The European Union, the key ally of the US, however, said it was readying retaliatory measures against the US if punitive trade tariffs are imposed.
