India, US seek greater clarity on trade issues

ANother labialize of India-US merchandise talks testament close in booker taliaferro washington on Wednesday, officials told HT, as negotiators from both sides seek greater clarity on the future direction of the trading relationship following the legal upheaval that has unsettled a framework agreement announced in February.“A continuing conversation between the two countries is in itself a good outcome. We need more detail on the thinking of the US side about what will happen moving forward when it comes to tariffs,” said one official, speaking on condition of anonymity.The Indian negotiating team, led by additional secretary Darpan Jain, met with US negotiators led by assistant US Trade Representative Brendan Lynch to begin talks on Monday.Also read | US Ambassador confirms India's arrival in US for bilateral trade talksThe round with the US concludes on Wednesday.The urgency is sharpened by an approaching deadline.“The stakes are high in this latest negotiating round in Washington, and time is running out to conclude the interim agreement before the Trump administration announces new tariffs under Section 301. If the agreement is not pinned down by then, we might see tariffs climb above 18%,” said Mark Linscott, senior adviser at the US India Strategic Partnership Forum and a former US trade negotiator.The talks take place against a backdrop of significant turbulence. Under the India-US trade framework announced on February 7, Washington had committed to reducing tariffs on Indian imports from a combined 50%—a 25% reciprocal tariff and a 25% punitive levy for India’s purchases of sanctioned Russian crude—to 18%, giving Indian merchandise a comparative advantage over competitors such as China.India, for its part, undertook to reduce tariffs on a range of industrial and agricultural goods and expressed its intention to purchase $500 billion worth of US products, expected to boost trade in energy and technology sectors among others.But before the deal could be finalised, the US Supreme Court on February 20 struck down the Trump administration’s sweeping reciprocal tariffs as exceeding its statutory authority, invalidating the legal basis on which the proposed 18% rate had been built.The administration subsequently invoked Section 122 of the Trade Act of 1974 to impose a temporary 15% uniform tariff on imports from all countries—a stopgap valid for 150 days and set to expire in July.In March, Washington announced Section 301 investigations into alleged unfair manufacturing practices—specifically structural excess industrial capacity—against India and 15 other major economies.Unlike Section 122, Section 301 carries no cap on tariff levels and no time limit, though it requires a formal investigative process including public hearings.It has previously been used most extensively against China—the 25% tariffs on Chinese goods from Trump’s first term were backed by a Section 301 probe and have withstood court challenges.The conclusion of an interim bilateral trade agreement would, officials said, resolve the Section 301 exposure for India—but the window to do so before new tariffs are announced is narrowing.