A 'zero-for-zero' tariff strategy under the proposed bilateral trade agreement between India and the US is unlikely, as the two countries are at different levels of economic development.
Certain trade experts have suggested that India can propose a 'zero-for-zero' tariff strategy to the US for addressing America's reciprocal tariff hikes.
An official said that zero-for-zero tariffs can be possible between the US and the European Union (EU) as both are developed and advanced nations.
The India-US agreement will always be a "package" deal that could include issues such as goods and non-tariff barriers, the official said adding "it does not happen like this that if he will do 'zero' in electronics, we will also do in electronics. Trade agreements do not happen like this. It is a wrong thinking".
India and the US have been engaged in negotiating a bilateral trade agreement (BTA) since March. Both sides have targeted to conclude the first phase of the pact by fall (September-October) of this year with an aim to more than double the bilateral trade to USD 500 billion by 2030 from about USD 191 billion currently.
"The work has started for the agreement. India is far ahead of other countries in negotiating a trade deal," the official added.
India and the US have decided to hold sector-specific talks in the coming weeks under the agreement.
The decision to hold discussions in the coming weeks follows four days of talks -- between senior officers of India and the US -- which concluded here on March 29.
In February, Delhi-based think tank GTRI suggested that India should propose a zero-for-zero tariff strategy to the US for addressing America's tariff hikes. Under this strategy, it has stated that India can identify tariff lines (or product categories) where it can eliminate import duties for American imports and in lieu of that, the US should also remove duties on a similar number of goods.
In a trade pact, two countries either significantly reduce or eliminate customs duties on the maximum number of goods traded between them. They also ease norms to promote trade in services and boost investments.
While the US is looking at duty concessions in sectors like certain industrial goods, automobiles (electric vehicles particularly), wines, petrochemical products, dairy, agriculture items such as apples, tree nuts, and alfalfa hay; India may look at duty cuts for labour-intensive sectors like apparels, textiles, gems and jewellery, leather, plastics, chemicals, oil seeds, shrimp, and horticulture products.
The US accounts for about 18 per cent of India's total goods exports, 6.22 per cent in imports, and 10.73 per cent in bilateral trade.
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