New Delhi has worries about similar punitive levies as Washington’s global tariffs of 10% are set to lapse next week
India’s concerns on finalizing a trade deal with the US have been underscored by Washington’s move to slap 25% tariffs on Brazil.
The US announced the 25% tariffs on Thursday following a Section 301 investigation into Brazil’s trade practices. The tariffs are scheduled to take effect on July 22.
The Office of the United States Trade Representative cited Brazil’s preferential tariff arrangements with India and Mexico as one of the reasons for imposing the tariffs on certain Brazilian imports.
New Delhi has concerns that the US is likely to slap similar tariffs on India, which is also the subject of a probe along with China and other countries. US Treasury Secretary Scott Bessent indicated last month that tariff rates could return to previous levels after US Trade Representative Jamieson Greer “concludes studies on Section 301 investigations.”
The US has been exploring ways to bring back the levies after the Supreme Court struck down the earlier tariffs imposed by the Trump administration under the International Emergency Economic Powers Act as illegal.
India and the US announced the broad contours of a trade pact in February after protracted negotiations. However, talks for a final deal lost momentum after the Supreme Court’s decision.
The temporary 10% tariffs imposed under Section 122 of the Trade Act after the court decision will lapse on July 24. That could potentially level the playing field for all countries, blunting any competitive advantages that New Delhi would have gained from a trade deal. The same would apply to any additional levies under Section 301.
Indian Trade Minister Piyush Goyal said last month that New Delhi “cannot enter into force a US deal” until the “framework for getting a competitive advantage is finalized.
India’s key export sectors, including textiles, could all face uncertainty depending on how the US proceeds with the Section 301 probes, academic Biswajit Dhar was cited by the Hindu Business Line as saying.
