Priyanka Tiwari
Share
Suspense crime, Digital Desk : The prospects for a long-awaited "mini trade deal" between India and the United States are facing fresh turmoil after the US announced significant retaliatory tariffs on a range of Indian goods. This move complicates already slow-moving negotiations and casts serious doubt on India's goal of finalizing an agreement by its self-imposed July 8 deadline.
The new tariffs, some as high as 25%, target over 40 Indian products, including key exports like basmati rice, shrimp, furniture, and certain gold and silver items. This action by the US Trade Representative (USTR) is a direct response to India's 2% equalization levy, or digital services tax (DST), which impacts the revenue of foreign e-commerce and technology companies operating in the country.
This development creates a significant hurdle for the proposed trade pact, from which both nations stand to gain. India has been seeking the restoration of its benefits under the Generalized System of Preferences (GSP), which the Trump administration revoked, along with greater market access for its agricultural and engineering products. In return, the US has been pushing for lower duties on its farm goods, such as almonds and apples, and medical devices.
While the US has immediately suspended the newly announced tariffs for 180 days to allow for negotiations on a global tax framework through the OECD, the threat remains a powerful bargaining chip. The move signals a toughening stance from the Biden administration and adds a new layer of complexity to the talks.
According to officials, the Indian government is currently assessing the impact of this new trade action. With this fresh obstacle, the path to concluding even a limited trade deal has become significantly more challenging, and the July deadline appears to be out of reach.
Read More: Pakistan and Afghanistan Border Tensions Flare Up with Night Long Heavy Firing
