India, US to sign first tranche of trade deal in 5 days: Piyush Goyal

Amid growing criticism, India and the United States are likely to finalise and sign a joint statement on the first tranche of their bilateral trade agreement within the next four to five days, Commerce and Industry Minister Piyush Goyal said on Thursday (February 5).

Goyal said the joint statement would pave the way for the US to issue an executive order reducing tariffs on Indian goods to 18 per cent. At present, Indian exports to the US face a 25 per cent reciprocal tariff, along with an additional 25 per cent tariff linked to India’s purchase of Russian crude oil.

Also Read: Congress attacks India-US trade deal, flags farm import concessions

He added that while the joint statement would be signed shortly, a legally binding agreement for the first tranche of the trade pact is expected to be concluded by mid-March.

Legal agreement to follow joint statement

The minister said the joint statement would be followed by an exhaustive legal agreement detailing the commitments of both sides.

Commerce Secretary Rajesh Agrawal said the government was hopeful of signing the legal agreement by mid-March, after which the agreed tariff changes would come into effect.

Agrawal added that the signing of the legal text would result in India reducing tariffs on select US goods, in line with the commitments under the first tranche of the agreement.

No investment commitments in current tranche

Goyal clarified that the current tranche of the bilateral trade pact does not include any investment commitments. He said discussions at this stage were focused on trade facilitation and tariff rationalisation rather than capital inflows.

Significance of the deal

The proposed trade agreement follows the US decision to impose steep tariff hikes on Indian goods earlier this year, citing concerns over India’s energy imports from Russia and trade imbalances.

Also Read: Why India-US trade deal raises fears of one-sided concessions

The first tranche of the India-US trade deal is aimed at rolling back these punitive duties, restoring predictability for exporters, and preventing further escalation in trade friction, while laying the groundwork for a more comprehensive bilateral trade agreement.

Opposition to the deal

Meanwhile, Congress and opposition parties have raised concerns over the deal and claimed that reducing tariffs for US imports would affect local businesses and agriculture. Jairam Ramesh, the general secretary in charge of communications of Congress, in a tweet on February 4, wrote, "It is 100% clear that Monday’s announcement of the deal at the urging of the Prime Minister was for grabbing headlines—nothing more, nothing else. It was urgent and momentary damage control on his part. However, when the details of the deal are finally out, the real damage to Indian farmers will become most painfully evident."

However, Goyal on Wednesday allayed fears that Indian agriculture and dairy sectors would be compromised. He said the two sensitive sectors are fully protected under the trade deal.

But without the official signing of the agreement and public disclosure of its terms, uncertainty continues to surround the deal, which has been dubbed the “greatest of all” trade agreements.

(With agency inputs)