India Proposes Eliminating Tariffs On Steel, Auto Parts, Pharmaceuticals In US Trade Discussions

India has suggested eliminating tariffs on steel, auto parts, and pharmaceuticals in trade talks with the US. This proposal is reciprocal and applies to a specific import quantity. Beyond this limit, standard duties would apply. Indian officials made this offer during a visit to Washington last month to speed up discussions on a bilateral trade agreement anticipated by autumn.

Both countries are focusing on certain industries to finalise an early trade agreement before the 90-day pause on US President Donald Trump's retaliatory tariffs ends. Amidst the US economic downturn, Trump hinted that some trade agreements might be concluded soon, offering hope for trading partners aiming to avoid increased US import tariffs. Asian nations like South Korea, Japan, and India are leading efforts to secure interim deals with his administration.

Quality Control Orders Concerns

Washington has urged India to address its concerns regarding Quality Control Orders (QCOs), which it views as non-tariff barriers affecting its exports. These mandatory quality standards set benchmarks for both domestic and foreign manufacturers before they can sell goods in India. Critics argue that these standards lack transparency and fairness.

India is open to revisiting its current QCOs in areas such as medical devices and chemicals. The country has proposed a mutual recognition agreement with the US, allowing both nations to accept each other's regulatory standards and practices. It remains uncertain if these proposals will be included in the final agreement.

Trade Negotiations Progress

The number of QCOs has significantly increased from just 14 before 2014 to over 140 since 2017, according to a report. An email sent to India's Ministry of Commerce and Industry seeking comments was not immediately answered.

The ongoing negotiations aim to resolve these issues and reach a mutually beneficial agreement between the two countries. As talks progress, both sides are working towards addressing concerns and finding common ground on various trade-related matters.

This potential trade deal holds significant importance for both nations as they seek to strengthen their economic ties and enhance bilateral trade relations. The outcome of these discussions could have far-reaching implications for industries involved in the negotiations.