India-US interim trade deal postponed; Will be signed after new tariff structure is ready

This trade deal between India and the US was originally scheduled to be signed in March.

New Delhi: The interim trade deal between India and the United States has now been postponed for the time being. According to government sources, this deal will only be signed once the US has finalized its new global tariff structure. In fact, in a recent ruling, the US Supreme Court struck down the powers previously held by Donald Trump, powers under which he utilized the International Emergency Economic Powers Act (IEEPA) to impose heavy tariffs.

Deal slated for March signing postponed

This trade deal between India and the US was originally scheduled to be signed this very month, March. However, the US Supreme Court’s ruling has invalidated the previous reciprocal tariffs. Consequently, the Trump administration is now compelled to formulate a new framework for global trade.

Pending the introduction of this new structure, the US has temporarily imposed a 10% tariff on all nations under Section 122 of the Trade Act of 1974. This interim arrangement could remain in effect for the next five months.

Deal will be signed once new tariff structure is ready

A senior government official stated, “We are working on the intricacies of the deal, but it will only be signed once their new tariff structure is ready. Any nation enters into an agreement only when it perceives a market advantage relative to other competing nations.”

India had previously set a reciprocal tariff rate of 18% for certain specific products. The official noted that if the US’s new structure mirrors the previous one, the rates will remain unchanged; otherwise, adjustments are possible.

Discussions underway on non-tariff barriers

Beyond tariffs, both nations are engaged in continuous dialogue to resolve issues concerning non-tariff barriers as well as sectoral tariffs imposed under Section 232.

An official stated, “We are utilizing this time constructively to ensure that when the opportune moment for signing arrives, there are no delays caused by technical issues. The government is also currently examining the legal implications regarding the ‘Section 301’ investigation being conducted by the U.S.”