India-US Trade Deal Likely To Retain Tariff Safeguard
India and the US are likely to retain a tariff safeguard in their proposed trade agreement, allowing either country to revise its commitments if the other changes previously agreed tariff terms, a government official said, according to Moneycontrol.
The safeguard, included in the February 6 joint framework, is aimed at protecting India from making open-ended tariff concessions if Washington subsequently alters its duty structure. It does not prevent either country from imposing new tariffs but allows the affected side to modify its own commitments in response.
Under the February framework, India had proposed reducing or eliminating duties on several US industrial and agricultural products, while the US agreed to an 18% reciprocal tariff on originating Indian goods, along with additional concessions linked to the broader agreement.
The provision has gained importance amid growing uncertainty over US trade policy. Indian exports are already facing an additional 10% tariff under US Section 301 action, while investigations into global excess capacity could lead to further duties.
Potential US measures related to Russia sanctions and proposed tariffs on pharmaceutical imports also pose risks to Indian exporters.
Despite these challenges, India and the US continue negotiations to conclude the trade agreement, with Commerce Secretary Rajesh Agrawal reaffirming both sides’ commitment to the February framework.
