The official data, released on Monday, showed India’s goods exports to the US fell 12.88% year-on-year to $6.89 billion in February, reflecting the impact of higher tariffs imposed on the country, while imports from the US rose 36.5%.
The agreement will also take care of the US’ Section 301 tariffs, the investigations of two of which include India. The pact will be finalised once Washington restores global tariff architecture following its Supreme Court ruling that had struck them down.
Also read: Trump vows to bring back tariffs ‘in another form’ after Supreme Court blowThis is because countries around the world are signing trade deals with the US based on their comparative advantage vis-a-vis their competing nations.
According to the official, the India-US trade agreement was supposed to be signed in March, but at that time the US Supreme Court judgment on International Emergency Economic Powers Act (IEEPA) tariffs had not come.
Supreme Court verdict
The trade pact will now be finalised after Washington restores its global tariff architecture, the official said. This is because countries are signing trade deals with the US based on their advantage vis-à-vis competing nations.
As per the official, the India-US trade deal was supposed to be signed in March, but when that decision was made in early February, the US Supreme Court judgment on International Emergency Economic Powers Act (IEEPA) tariffs had not come.“The US is trying to recreate a tariff architecture globally. The deal is already finalised. Teams are talking but at the end of it, every country does a deal at a comparative advantage. Whenever the US side is ready with the architecture, we will do it at the opportune time,” the official said. “There is no standoff…We will have to wait to sign till the architecture is ready,” he said.
Also read: Trump tariff refunds of $166 billion inch closer as US system is 40–80% complete
After the US Supreme Court revoked President Trump’s authority to use the IEEPA for imposing country-specific reciprocal tariffs, Washington imposed a blanket 10% surcharge on all countries effective February 24 under Section 122 of the Trade Act. This section permits the US President to impose tariffs of up to 15% for up to 150 days, beyond which it needs US Congress approval.