India to sign US deal after new tariff framework clear: Centre

India will sign its proposed trade agreement with the US once a new global tariff framework being developed by Washington becomes clear, the government said on Monday, indicating that the timeline for the deal is linked to evolving changes in the US tariff regime.

Addressing a briefing in New Delhi, Rajesh Agarwal, Commerce Secretary in the Ministry of Commerce and Industry, said the US was currently working on a revised tariff architecture globally, which would form the basis for the eventual agreement.

“The US deal was to be signed in March. But tariffs under the International Emergency Economic Powers Act do not exist per se due to rulings by the Supreme Court of the US,” Agarwal said indicating that the March deadline for signing the deal would no longer apply.

He added that a baseline tariff structure had now emerged. “Under Article 122, tariffs of about 10 per cent exist globally now. The US is trying to recreate a tariff architecture globally. Once that happens, it will be better to sign the deal,” he said.

According to Agarwal, the agreement would be concluded once the tariff framework were stabilised. “Whenever we are ready, the US side is ready with the new tariff architecture. That will be the opportune time to sign the deal,” he said.

The comments come amid wider disruptions to global trade caused by the ongoing conflict involving Iran, Israel and the US in West Asia.

Agarwal acknowledged that the crisis had created logistical challenges affecting both sea and air cargo movement. “There are logistical challenges that are being faced. Air cargo is also facing certain challenges because of disruptions in flights,” he said.

He said the situation could affect both exports and imports, though trade flows were unlikely to collapse.

Agarwal said negotiations on a free trade agreement with Canada are progressing. “Both sides are already in discussions virtually and are likely to hold further virtual engagements this month,” he said. The first round of negotiations was expected to take place in April or May, he added.