Notwithstanding the 50% tariffs imposed by the US, India’s merchandise exports continued to rise in September, and the government remains hopeful of reaching a trade deal with the US at the earliest.
Commerce Secretary Rajesh Agarwal, who is India’s chief negotiator for the trade deal, is set to leave for the US on Wednesday night, and a team of officials is already in Washington, DC and is trying to reach a win-win solution. India is also open to purchasing more crude oil from the US, subject to it being at the “right price”, he further said.
Engagement between India and the US continues, Agarwal told reporters on Wednesday, adding that there continues to be hope of a positive outcome.
Declining to call the current round of talks the sixth round of negotiations, Agarwal pointed out that the US is in shutdown, and the strength of the US administration and manpower is also down. “It is not right to have full trade negotiations, but both sides are seeing how to proceed,” he said.
The commerce secretary’s comments come at a time when India and the US have re-engaged in a bid to negotiate a trade deal by the end of the year. US Ambassador-designate Sergio Gor also met Prime Minister Narendra Modi, External Affairs Minister S Jaishankar, and the Commerce Secretary recently.
The US has imposed a 50% tariff on Indian exports, which includes a 25% penalty for the purchase of crude oil from Russia.
In the past, energy purchases by India from the US have been at about $23 billion to $24 billion, and there is currently headroom to purchase energy worth another $12 billion to $13 billion from the US, given the present trend, without worrying about the commitments of domestic refiners.
Meanwhile, India’s merchandise exports grew 6.75% in September to $36.38 billion from a year ago, as per provisional trade data released by the commerce ministry on Wednesday. In August, exports amounted to $35.1 billion.
“It has been a turbulent year for trade, but in all this turbulence, India’s exports have grown by 4.43% in the first half of the fiscal year,” noted the commerce secretary, adding that it is heartening to know that India’s exports have kept pace. Industry has managed the turbulence and maintained supply chains.
The impact of the US tariffs on exports will be evident in September and October, and the Commerce Ministry plans to assess commodity-wise data to understand the impact of the tariffs.
“We need to do a deep dive into the data to understand how commodities are faring after the US tariffs. About 45% of India’s exports to the US are outside the tariffs or have an MFN kind of status,” Agarwal noted, adding that he expects exports to the US to continue to grow.
