India aims to finalise early tranche of US trade pact before July 9

Absence of US Trade Promotion Authority may prolong broader BTA negotiations, but India hopes to secure early agreement on tariffs by July 9 deadline

India and the United States (US) are looking to agree on an early tranche of the trade pact before July 9, although the absence of the American Fast Track Trade Authority — Trade Promotion Authority (TPA) — may prolong discussions between both sides.

 

"We are working on the early tranche and as you are aware that there is a date (July 9), before that we would like to conclude this early tranche… We also visited the US twice. The US team also came here twice. There is good progress and we are hopeful that this will be done within the timeline," Commerce Secretary Sunil Barthwal told reporters. The next date of in-person negotiations on the BTA and its initial tranche is yet to be decided, but both sides are engaging virtually without a break.

 

 

However, commerce department officials said that TPA is America’s internal policy tool, and it is up to the US authorities to decide how to navigate its local regulations for the trade agreement with India.

 

The US Fast Track Trade Authority is a special mechanism that allows the American President to negotiate trade agreements and present them to Congress for an up-or-down vote, without amendments or procedural delays. According to experts, the authority has lapsed, and without this authority, any trade agreement negotiated by the US President is exposed to Congressional scrutiny, possible amendments, delays, or outright rejection. 

 

Currently, India is seeking a binding commitment from the US on pre-April 2 tariff levels for labour-intensive sectors as part of an early tranche of the proposed bilateral trade agreement (BTA). This would involve doing away with the universal 10 per cent tariff imposed by the Donald Trump administration. However, the US has told India that it currently does not have the Congressional mandate to make such tariff cuts.

 

Both countries have committed to signing a mutually beneficial BTA by this autumn, though India is pushing for an early tranche to avoid a 26 per cent reciprocal tariff, scheduled to kick in from July 9.