India-US Trade agreement may have reached a plateau: Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on Monday said the trade negotiations on the IndiaUS trade agreement have been hard and very rigorously conducted but felt it might have reached a stage where providing further concessions would be difficult for both the sides reported news agency PTI On the IndiaUS trade agreement she said The agreements negotiations are still ongoing although we like to believe that both sides have reached a plateau beyond which giving or taking might be very very difficult But maybe if there is room to operate from both sides would do itTrade imbalanceSitharaman said a key feature of IndiaUS trade relations is the trade imbalance in Indias favour with US seeking to reduce its deficitNaturally the deficit is there on their side or the balance is unfavourable for the US so they would want to reduce that imbalance she said She said from its perspective US would seek to make up for what it believes it has lost over the yearsCiting Indias trade relationship with China as an example she said trade imbalances have traditionally been addressed through negotiations with countries seeking greater market access for their goods and servicesTariff has become weaponisedHowever she said tariffs are increasingly being used as a tool to address trade imbalancesNow the imbalance is being sought to be addressed through other means where as you rightly said tariff has become weaponised Tariff was an instrument of negotiation and tariff had a certain framework within which you would apply it Today the framework is there but tariffs are going she saidShe questioned whether India could adopt a similar approach in dealing with China given the significant trade imbalance between the two countries skewed in Chinas favourThe trade imbalance with China for India for instance since 2014 has been growing exponentially So when youre talking of trade and trade imbalance being the sole criteria to reduce the imbalance to what extent beyond negotiation can you go she wonderedHer comments come amid a backdrop where US imposed 100 per cent tariffs on the worlds top five purchasers of Russian oil or natural gas including India and China In July it had imposed a 10 per cent tariff on goods imported from India on issue forced labourIndia and the US in February announced the finalisation of the framework for the first phase of the bilateral trade agreement however changes in the tariff landscape in the US have led to further negotiations on the pactIndias trade with USIndias exports to the US increased by 2183 per cent to USD 84 billion in August while imports rose 6578 per cent to USD 597 billionDuring AprilAugust 202627 Indias merchandise exports to the US gained 617 per cent to USD 428 billion while imports jumped 296 per cent to USD 28 billionThe US was the largest trading partner of India in 202526 at USD 1322 billion exports USD 8651 billion and imports USD 4562 billionIndia EU trade pactShe described the IndiaEuropean Union trade agreement as an example of Indias approach to negotiating trade pacts according to IANSThe mother of all deals was an apt description for the agreement FM Sitharaman said referring to a phrase used by European Commission President Ursula von der LeyenWhile noting the EU agreement would cover economies representing about two billion people and around a quarter of global GDP she said India had opened up 925 per cent of its tariff lines and about 97 per cent of trade value under the agreement while the EU had opened up about 99 per cent of trade value and around 97 per cent of tariff linesThe minister said the selection of market access commitments was based on the complementarity of the two economies and the need to ensure that Indias competitiveness was not adversely affectedWith inputs from PTI and IANS