As per news reports, trade barriers, whether tariff-based or non-tariff, influence global commerce. However, according to a news report, non-tariff barriers impact trade 2.5 times more than tariffs, making them a crucial aspect of trade negotiations. These barriers include regulatory standards, licensing requirements, import quotas, and complex certification procedures, all of which add to the cost and time of trading goods and services across borders.
India’s Trade Strategy with the US
With India aiming for a multi-sector bilateral trade agreement with the US, the focus is on increasing industrial imports from the US while enhancing labour-intensive exports from India. According to reports, India plans to quantify the impact of non-tariff barriers in its trade discussions and will also ensure the protection of domestic interests in key sectors such as dairy and agriculture.
Consultations and Negotiation Strategies
To devise an effective negotiation strategy, the Indian government is engaging with various sectors, including pharmaceuticals, to gather industry feedback. Reports indicate that India is also evaluating the global impact of key international regulations such as:
- European Union Deforestation Regulation (EUDR) – A regulation that could affect Indian exports related to agriculture and forestry.
- EU Carbon Tax – A move that might impact carbon-intensive industries and exports.
- Rupee Devaluation and Wage Suppression – Factors influencing India’s competitive edge in global trade.
- Evergreening of Patents – A significant concern for India’s pharmaceutical industry, as it affects generic drug manufacturing.
Sectoral Meetings and Auto Tariff Revisions
The Indian government has already extended lower auto tariffs under the Scheme for Promotion of Manufacturing Electric Cars in India, aiming to attract investment in the electric vehicle sector. Additionally, sectoral meetings are expected to be conducted in the coming days to streamline trade discussions and address key concerns across industries.
Awaiting Bilateral Trade Discussions
As India awaits confirmation of all government appointments by the Trump administration, government sources indicate that bilateral discussions will soon commence at the trade ministry level. Reports highlight that, so far, only a limited number of concessions have been granted from the existing 12,000-odd tariff lines, and both countries are yet to finalise the structure of a potential trade deal.
Generalised System of Preferences (GSP) Status
According to reports, the reinstatement of the Generalised System of Preferences (GSP), a key trade benefit for developing countries, remains uncertain. The programme is currently awaiting reauthorisation by the US Congress, making its restoration contingent on legislative approval.
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