Key points
- Bilateral trade between India and the US is worth over $190b
- New Delhi even offered zero tariffs on industrial goods from US
- Industrial goods form about 40pc of US exports to India
ISLAMABAD: US President Donald Trump on Wednesday ordered steeper tariffs on Indian goods over continued purchase of Russian oil, dashing New Delhi’s hopes for a favourable deal on tariffs with Washington.
After five rounds of trade negotiations, Indian officials were so confident of securing a deal with the US that they even signalled to the media that tariffs could be capped at 15 per cent, according to Reuters.
The British news agency reported, citing sources, that Indian officials expected US President Donald Trump to announce the deal himself weeks before the August 1 deadline.
Dashed hopes
Contrary to their hopes, the announcement never came.
Four Indian government officials and two US government officials have reportedly revealed how the talks possibly collapsed despite technical agreements on most issues.
The officials on both sides said a mix of political misjudgment, missed signals and bitterness broke down the deal between the two trading countries whose bilateral trade is worth over $190 billion.
Zero tariffs
Reuters reported, quoting two Indian government officials, that New Delhi was offering zero tariffs on industrial goods that formed about 40 per cent of US exports to India.
Despite domestic pressure, India would also gradually lower tariffs on US cars and alcohol with quotas and accede to Washington’s main demand of higher energy and defence imports from the US, the officials said.
“Most differences were resolved after the fifth round in Washington, raising hopes of a breakthrough,” one of the officials said, adding negotiators believed the US would accommodate India’s reluctance on duty-free farm imports and dairy products from the US.
Miscalculation
It was a miscalculation. Trump saw the issue differently and wanted more concessions.
“A lot of progress was made on many fronts in India talks, but there was never a deal that we felt good about,” said one White House official.
“We never got to what amounted to a full deal – a deal that we were looking for.”
