India and the US may announce a trade deal shortly that could address the issue of penal duties on steel and aluminium imposed by Washington on Indian exports.
“A trade deal is in the works between the Commerce Ministry and the US Trade Representative's (USTR) office. It is likely to be finalised shortly,” a government official told
The deal could include greater market access for certain agriculture and dairy products in both countries brought about by removing non-tariff barriers, including lowering standards, the official added.
India’s timeline of March 2 for imposing retaliatory duties on US items in response to American duties on its steel and aluminium is now likely to be postponed by a few days. “There are talks of postponing the imposition of retaliatory duties by another 15 days as a deal seems very likely,” the official said. The Donald Trump regime, which has been pressing India to increase imports from the US to bridge the trade imbalance between the two countries, wants India to provide greater market access in a number of areas such as dairy, agriculture, energy and health equipment.
India has already responded by buying oil and gas from the US in 2008 worth an estimated $3 billion. “The oil purchase from the US will be increased further in 2019 bringing down the trade deficit further,” the official said.
The trade deficit between India and the US bridged by almost six per cent in 2017 to $22.9 billion, according to the ‘Trade Estimate 2018’ released by the USTR earlier this year.
In March last year, the US imposed stiff penal tariffs of 25 per cent on steel and 10 per cent on aluminium imported from India, China, the EU, Mexico, Russia and Canada, citing security threats.
New Delhi announced retaliatory tariffs on 29 items from the US in June 2018 but has been delaying implementation hoping for a deal with Washington.