The US on Friday pitched for a macro, large and grand trade agreement with India, and not ‘product-by-product’ arrangement to boost bilateral ties between the two countries. US Commerce Secretary Howard Lutnick said India needs to open its agriculture market, emphasising that it can not be ‘off the table’ when the country is negotiating with its largest trading partner.
“Because India is so gigantic, and the US is so gigantic, the right way to do it (trade pact) is a macro, and that’s why we think we can get it done. The US is interested in doing a macro, large-scale, broad-based trade agreement with India that takes everything into account and that I think it can be done. “…it’s time to do something big, something grand, something that connects India and the US together, but does it on a broad scale, not product-by-product, but rather the whole thing. Let’s bring India’s tariff policy towards America down,” he said at the India Today Conclave.
In the agriculture sector, he said the Indian agriculture market has to open up, and it can not just stay closed. “Now, how do you do that? And the scale by which you do that? Maybe you do quarters. Maybe do limits. You can be smarter when you have your most important trading partner on the other side of the table. You can’t just say…it’s off the table. That’s just not an attractive way of doing business,” Lutnick said.
The right way to do business is to put everything on the table, but do it smartly and do it thoughtfully, he said, adding that quotas or limits can be used. During the recent visit of Prime Minister Narendra Modi to Washington, India and the US announced their commitment to more than double the two-way commerce to USD 500 billion by 2030 and negotiate the first tranche of a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA) by fall of 2025.
Commerce and Industry Minister Piyush Goyal is in Washington since Monday for the trade talks with US Trade Representative (USTR) Jamieson Greer and Lutnick. Lutnick also said that countries like India have one of the highest tariffs in the world, and that is why US President Donald Trump is talking about imposing reciprocal tariffs.
Tariffs are import duties imposed and collected by the government and paid by the companies to bring foreign goods into the country. “How you treat us is how we would like to treat you. And I would like to tell you that India has some of the highest tariffs in the world, and that will require a rethinking of the relationship, the special relationship, between India and the United States,” he said. He suggested India to cut down the tariff levels and look at the trading opportunities with America in a special and unique way.
On whether it is possible to finalise the agreement by the fall of this year, he said, “If the time frame was designed to do motorcycles and bourbon and this product and that product…It would take forever”. Given the size of the two countries, America is interested in doing a broad-based trade agreement with India, he added.
On India’s reservations for including the agri sector in the trade deal, the US Commerce Secretary said: “Your government truly understands your market, and we understand ours, and the key is to try to find that place. So, yes, the Indian market for agriculture, it has to open up. It can’t just stay closed”. “Now, how do you do that? And the scale by which you do that? Maybe you do quarters. Maybe do limits. You can be smarter when you have your most important trading partner on the other side of the table.” He also rejected the argument that import duties are inflationary.
“India has amongst the highest, if not the highest tariff rate in the world, the second highest tariff rate in the world. And because you have such high tariffs, do you have inflation? Of course, not. Remember, inflation only comes from running deficits and printing money…So, my opinion to that is that is nonsense,” Lutnick said.
On India, US military, and diplomatic relations, he said that India has historically bought significant amounts of its military from Russia, and “we think” that is something that needs to end. “India is the eye in BRICS…trying to create a currency to replace the dollar as the global economic currency of the world…These kinds of things do not create the love and affection that we really deeply feel towards India.
“We would like those things to end, and we would like trade to be more fair, and we would like to create an incredible and strong and powerful relationship with India going forward. But those particular things, for example, are on the table for discussion, and your tariffs…are on the table for discussion,” he added. On concerns being raised by certain quarters whether America can be considered a reliable and trusted supplier of weapon systems to India, he said the US defence sector is “the greatest in the world”, and it is vital for India to stop listening to those “silly” people and come back and talk to the US.
On the USA’s gold card visa proposal, the US Commerce Secretary said if people come into America through this card, they will only pay tax in America and not on their global income. “And we think there is an enormous scale of opportunity for people who want to come to America and want to have this gold card, which is basically just an extraordinary green card,” he added.
The pressure of the US on New Delhi to open up the Indian agriculture market might rise with US Commerce Secretary Howard Lutnick saying India needs to open its agriculture market. Lutnick also suggested that India cuts down tariff levels on US goods. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
