Commerce and Industry Minister Piyush Goyal on Friday indicated that the government was not inclined to show undue haste to conclude a trade deal with the US as it never negotiates at gunpoint.
“I have said it many times before that we do not negotiate at gunpoint. Time restrictions are good as they encourage us to talk swiftly, but until we are able to protect the interests of the country and people, it is never good to be hasty,” Goyal said on the sidelines of an event here, when asked about the progress of the proposed Bilateral Trade Agreement (BTA) between India and the US.
Later, speaking at the 9th Global Technology Summit here, the minister said India’s current tariff protection measures are primarily directed at non-market economies that engage in unfair trade practices. “India is well-positioned to engage in bilateral partnerships with countries that value reciprocity, trust, and fair play,” Goyal said.
Meanwhile, a government official said India and the US are exploring an interim trade deal within 90 days, focusing primarily on tariffs, provided the outcome is a ‘win-win’ for both nations. US President Donald Trump has paused country-specific reciprocal tariffs for 90 days, except for China, forcing countries to expedite bilateral trade negotiations with Washington.
In February, Prime Minister Narendra Modi and President Trump announced their intention to finalise the first phase of a mutually beneficial, multi-sectoral BTA by the fall of 2025. Both sides started discussions on the deal last month.
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However, officials believe wrapping up the first tranche of the BTA discussions within the 90-day window may not be feasible.
“We are in continuous engagement (with the USTR team). A lot of discussion will be on video conference. There could be some visits both ways. A lot of possibilities are there to finalise low hanging fruits. A lot of possibilities are there to finalise the form and shape of the BTA,” the official cited above said, adding that the terms of reference or the scope of the deal have been finalised.
Last week, the US announced country-specific reciprocal tariffs ranging from 10 per cent to 50 per cent on imports from several countries. As much as 26 per cent reciprocal tariff was imposed on India. Currently, a 10 per cent ad valorem tariff, over and above the existing most-favoured nation (MFN) rate, continues on American imports.
“The work has started. India is far ahead of other countries in negotiating a trade deal,” official said.
An official statement said the Department of Commerce and the Directorate General of Foreign Trade (DGFT) are actively tracking developments, particularly tariff changes imposed by the US, import surges or dumping, and export-related challenges. The DGFT has operationalised a dedicated ‘Global Tariff and Trade Helpdesk’ to assist stakeholders in navigating emerging trade issues.
“Given the evolving trade landscape and the introduction of various tariff and counter-tariff measures, there may be both new export opportunities and heightened import pressures from specific countries or product sectors. Exporters and importers experiencing such shifts are encouraged to share their inputs and suggest potential support measures,” the statement said.
The helpdesk will collate trade-related issues concerning other ministries and state governments and will coordinate to seek their support and provide possible resolutions.
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India does not intend to encourage foreign direct investments (FDI) from China, Commerce and Industry Minister Piyush Goyal said on Friday, indicating New Delhi's intentions of not easing overseas investment curbs imposed on the neighbouring country in 2020.
FDI applications from countries sharing land borders, such as China, have to mandatorily seek government approval for all sectors. This policy was issued in April 2020.
"As of now, there's hardly any foreign direct investment from China...It was the same 25 years ago when it (FDI) was open (from China), not too much Chinese investment has come to India. Nor are we encouraging any significant investment coming in from China at all. At the moment, that is the policy," Goyal said here at an event.
The remarks assume significance as certain quarters are of the view that the rule needs to be eased to attract technology and capital.
In 2020, the government made its approval mandatory for FDI from countries that share land borders with India.
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Countries that share land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan.
China stands at the 22nd position with only 0.37 per cent share (USD 2.5 billion) in the total FDI equity inflow reported in India from April 2000 to March 2024.
Last year, the pre-budget Economic Survey made a strong case for seeking FDI from Beijing to boost local manufacturing and tap the export market.
Goyal also said that India's effort is to integrate its economy with the developed world, who believe in fair play and follows honest business practices, and where domestic industries get an equal opportunity to do business.
"Everything will be based on reciprocity. Everything will be based on mutual trust and mutual benefit. And therefore, I personally, don't see any great disturbance say even except for a short period of time. I think this reset that the world is going through is actually very good for the world," he said.
He added that the genesis of this tariff problem goes back to the late 1980s and mid-1990s.
"Then China was accepted into the World Trade Organization and MFN (most favoured nation) benefits were given to China by all countries of the world, collectively with the desire and hope that we could trust them to behave better.
"Sadly, that never happened. And over the years, country after country and industrial sector after sector has realized how their practices have hurt businesses and economies," he said.
He added that in 2019, India decided not to join the Regional Comprehensive Economic Partnership (RCEP) as it felt that the guiding principles on which free trade should work were not being respected in that grouping. China is part of RCEP.
And today it is being vindicated by the current situation in the world, he said.
When asked if there is any pressure because of this relationship, China is not sending engineers or specialized workers to India, Goyal said India has a huge talent pool as it produces the highest number of STEM (science, technology, engineering, or mathematics) graduates every year.
"And very often, necessity encourages innovation. Necessity drives people to outperform themselves. And therefore, should there be a situation where any such undue pressure is brought on the Indian ecosystem? Our Indian people are very competent to come out of it and innovate in R&D and create solutions for our own needs, which will, I think, probably be better than what China can offer us," he added. E-commerce moratorium in WTO needs to be well defined
Minister also said- The WTO members need to clearly define a moratorium on imposing customs duties on e-commerce trade, as its extension is impacting countries like India to develop its own ecosystem in the digital trade sector.
The World Trade Organisation (WTO) members have agreed not to impose customs duties on electronic transmissions since 1998 and the moratorium has been periodically extended at successive ministerial conferences (MC), which is the highest decision-making body of the 166-member body.
India has time and again emphasised the need to discuss the scope of the duty moratorium as there are revenue implications because of it.
"We are not, per se, against it. (But) our problem is that we had an ITA-1 (Information Technology Agreement) earlier, which did not properly define (that) what comes within the ITA, and it kept getting expanded to cover more and more items causing loss or the lack of ability for countries like India to develop our own ecosystem.
"So, I think e-commerce moratorium needs to be well defined, what it will cover, and limited that and what it will not cover, but anything beyond that also will not be covered," he said here at an event.
The minister also said that India has always believed in multilateral organisations and it has supported them as they have a "very" important role to play.
India will continue to work within the framework of global rules of business and trade, but "I think the WTO will have to also reform itself on a few items", he said.
Citing examples, he said there is a need to fix a benchmark for defining or categorising a WTO member as a "developing" country.
If a country having a per capita income of USD 50,000 or USD 1,00,000 chooses to self-declare itself as a developing nation, "it is going to cause angst amongst the rest of the world, or the developed world", he said.
Goyal added that actually it causes angst even for developing countries because those people hurt the interests of other developing economies.
"...the developed world then takes a macro view, or the lens of the developed world towards the developing countries gets tainted," he said, adding that "it would be only fair that some kind of a benchmark could be set, or at least those countries who have now reached pretty good levels of prosperity take a more realistic view of their own status".
He also said that certain decisions taken over 10 years ago on agriculture have still not been implemented.
"Unless those get implemented, how can we move forward to other areas? So, in fisheries, we are trying to come to a consensus without really addressing the real problem of overfishing in the waters," the commerce minister said.
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