His comment comes a day after he concluded multiple rounds of meetings with United States Trade Representative Jamieson Greer in New Delhi. When asked how close a deal is, he said: “Close…if I remember correctly, the US minister (Greer) said 99% complete.”
India and the US reached an interim trade understanding on February 6 after months of tariff tensions. “The broad contours were all fixed up at that time,” Goyal said. “Our teams have been working since then to finalise the fine print, and there’s always a little give and take.” He said there were the International Economic Emergency Powers Act (IEEPA) tariffs when the deal was finalised, and the US had imposed a 50% tariff on India.
“We had negotiated that deal based on bringing down that 50% tariff to 18%. The whole deal was centred around that competitive advantage that we got with 18% over our neighbours and other competing countries, so we were lower than all our neighbouring and Asean countries, other than Singapore, and that is why the deal was attractive for us,” Goyal said.
However, the US Supreme Court had invalidated the IEEPA tariffs in February.
After that, Washington imposed 10% tariffs on all imports, which will expire on July 24. “Now, with the 10% which expires on July 24, we obviously have to have some reason to be able to…force that agreement that we have already agreed upon, and to ensure that we get a competitive advantage over what is being paid by our country,” Goyal said.
The advantage, he insisted, should be with countries “in the same stage of development or same cost structures as India has, whether it’s Vietnam, Thailand, the Philippines, Indonesia, Malaysia, or China, apart from Bangladesh, Sri Lanka, and all our neighbours… And until the framework of getting that competitive advantage can be finalised, we can’t enter into force a US deal.”India and the US had issued a joint statement on February 7, agreeing on a framework for an interim agreement on reciprocal and mutually beneficial trade. The framework reaffirmed their commitment to broader India-US BTA negotiations.
UK trade deal
The free trade deal with UK is the most comprehensive agreement that India has entered into so far, and “sky is the limit” in terms of the economic benefits that will flow from, Goyal said.
During his three-day visit to the UK, Goyal will review the preparedness of both countries for the implementation of the India-UK Comprehensive Economic and Trade Agreement (CETA), which will come into force from July 15. “Ministers may have changed, but I must compliment the UK for continuity in decisions and continuity in following through what was already negotiated,” he said. India and the UK now have a highly strategic partnership across technology, investments, defence and critical minerals, Goyal said.
“An agreement with a small economy like New Zealand has its own value propositions, has its own dynamics, and an agreement with the United States of America has a different story to tell,” he said. “One thing is for sure, that the UK free trade agreement is going to be the most comprehensive agreement that India has entered into so far, which will come into force in July.”
Highlighting that the two sides are growing the partnership in several dimensions, with the shared objective to fight against terrorism, he said both can complement each other. What the UK has to offer can be useful for India’s growth imperatives while what New Delhi offers can help the UK keep its costs under control and reach global markets.