U.S. Secretary of Commerce Howard Lutnick urged for a broad Free Trade Agreement with India, focusing on comprehensive tariff reductions rather than product-specific deals. His comments highlight the potential for improved bilateral trade relations amidst looming tariffs, indicating the need for strategic dialogue on trade policies.
On March 4, during the India Today Conclave, U.S. Secretary of Commerce Howard Lutnick expressed that the Trump administration seeks a comprehensive Free Trade Agreement (FTA) with India. Rather than engaging in lengthy negotiations on specific products, Lutnick emphasizes the importance of reducing tariffs on a broader scale to enhance economic ties between the two nations. This push for an overarching trade agreement marks a significant shift in diplomatic interactions.
During his discussion, Lutnick reflected on his conversations with Indian ministers and highlighted the necessity of transforming the current tariff structure. He stated, “Let’s bring India’s tariff policy towards America down, and America will invite India in to have really an extraordinary opportunity and relationship with us.” His comments followed a recent dialogue with India’s Commerce and Industry Minister Piyush Goyal, who visited Washington in early March, amidst the looming implementation of reciprocal tariffs set to commence on April 2.
India hopes to negotiate a bilateral trade agreement (BTA) by October, although President Trump has indicated that concessions for India may not be forthcoming. Lutnick noted the intertwined nature of tariffs and bilateral relations, stressing the need for a shift, saying, “How you treat us is how we would like to treat you… that will require a rethinking of the relationship.” He underscored that India’s high tariffs must be reconsidered in order to facilitate a more balanced trade relationship.
Despite initial resistance, Lutnick expressed optimism about potential market openings, particularly in India’s agriculture sector. He emphasized the importance of discussing all aspects of trade openly, proposing that certain products might entail quotas or limits. “The right way to do trade, the right way to do business is to put everything on the table, to do it smartly and do it thoughtfully,” he added.
On the subject of tariffs, Trump previously characterized the current rates as “temporary” and stated that imminent tariffs would initiate reciprocal trade measures. Lutnick highlighted that high tariffs do not directly cause inflation, attributing price increases to different economic factors. According to a Nomura report, the average effective tariff that India imposes on U.S. exports is 9.5%, while the U.S. tariffs on Indian exports stand significantly lower at 3%.
In conclusion, Howard Lutnick’s address outlines the U.S. administration’s aspirations for a comprehensive trade agreement with India, advocating for substantial tariff reductions rather than piecemeal negotiations. The conversation centers on fostering a balanced economic partnership that addresses the current high tariff rates while promoting open dialogue on trade policies. As both nations aim to finalize a bilateral trade agreement by October, substantial shifts in tariff strategies may pave the way for enhanced bilateral relations.
Original Source: www.business-standard.com
