India Needs Comparative Advantage in Trade Deal, Says Goyal Amid US Tariff Discussions

NEW DELHI: US treasury secretary Scott Bessent said tariffs could return to their previous levels if the Section 301 investigations being conducted by the US trade representative result in fresh levies. "Right now, we have something called Section 122 tariffs, which is a 10% global tariff. Currently, USTR, ambassador Jamieson Greer, is doing studies for Section 301. And if those studies are successful... then the tariff rates are going to go back to exactly where they were," Bessent said. The law allows the US administration to impose Section 122 tariffs for 150 days and they are due to expire by July 24. In its interim findings, the USTR has proposed 12.5% additional tariff on imports from India and over 50 other countries for their alleged failure to crack down on imports using forced labour. The results of the second probe on structural excess capacity in 15 countries, including India, are awaited.

Bessent made no bones about American president Donald Trump using the reciprocal tariffs last year to get countries to the negotiating table and strike deals, an objective that the Section 301 outcomes also seeks to achieve. While India and the US have been engaged in talks to finalise a trade deal, commerce and industry minister Piyush Goyal reiterated the need to ensure comparative advantage for India. "We had negotiated that deal on bringing down 50% tariff to 18%. The whole deal was centred around the competitive advantage over our neighbours and other competing countries. We were lower than all our neighbouring countries, all the Asean countries, other than Singapore. That is why the deal was attractive. "We have to have some reason to be able to enter into force the agreement that we have and to ensure that we get a competitive advantage over countries in the same stage of development or same cost structures as India, whether its Vietnam, Thailand, the Philippines, Indonesia, Malaysia, China apart from Bangladesh, Sri Lanka and all our neighbours. Until that framework of getting that competitive advantage can be finalised, we can't enter into force a US deal. That's broadly the discussion," Goyal said in London.