Issues around digital trade not discussed; to be part of BTA

Issues around digital trade and services between India and the US will be negotiated as part of the overall bilateral trade agreement and are not part of the interim trade deal, a senior government source explained.

“All matters relating to digital trade and services will be negotiated with the US as part of the bilateral trade agreement,” the source said.

After months of negotiations, India and the US announced on February 2 that they have agreed on an interim trade agreement under which the US will lower reciprocal tariffs to 25% immediately and then to 18% following an Executive Order.

The two countries also issued a joint statement outlining the key provisions of the trade deal. Officials underlined that the joint statement should be referred to for all issues around the trade agreement.

A factsheet put out by the US had initially referred to certain pulses on which India would lower or eliminate tariffs. However, this was later revised by the US and that part was removed.

The US also revised the text around India’s commitment to purchase $500 billion of goods and changed it to intent.

Sources underlined this was also done to reflect the joint statement and pointed out that the government cannot commit to such purchases as the onus would be on the private sector.

However, it is expected that imports from the US would pick up given the huge investments in data centres in India. Officials pointed out that India is also diversifying its crude oil supplies and purchase from the US is likely to increase further.

The Executive Order by the US to further lower reciprocal tariffs to 18% is likely this week. A delegation led by India’s chief negotiator Darpan Jain is set to visit the US next week to finalise the legal text for the interim trade deal.

It is expected that the trade deal will be signed between India and the US in March once the legal text is finalised.