India offers zero-for-zero tariffs on auto parts, steel from US
The mandatory quality standards have been criticised for being non-transparent and unfair
[NEW DELHI] India has proposed zero tariffs on steel, auto components and pharmaceuticals on a reciprocal basis up to a certain quantity of imports in its trade negotiations with the US, sources familiar with the matter said.
Beyond this threshold, imported industrial goods would attract the regular level of duties, the sources said, asking not to be identified as the discussions are private. The offer was made by Indian trade officials visiting Washington late last month to expedite negotiations on a bilateral trade deal expected by fall this year, the sources added.
The two nations are prioritising certain sectors to strike an early trade deal before the end of the 90-day pause on US President Donald Trump’s tit-for-tat tariffs, the sources noted.
Amid a contraction in the US economy, Trump suggested on Sunday (May 4) that some trade deals could be sealed as soon as this week, offering the prospect of relief for trading partners seeking to avoid higher US import duties. Asian economies, including South Korea, Japan and India are among the nations leading the race for reaching interim deals with his administration.
An e-mail to India’s Ministry of Commerce and Industry was not immediately answered.
Washington has also asked India to resolve its concerns around Quality Control Orders (QCOs), which it considers a non-tariff trade barrier for its exports, the sources said.
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The mandatory quality standards, which lay down benchmarks that both local and foreign manufacturers must meet before selling their goods in India, have been criticised for being non-transparent and unfair.
India is willing to reconsider its existing QCOs in sectors such as medical devices and chemicals, and has offered to sign a mutual recognition agreement with the US under which both nations will accept each other’s regulatory standards and practices.
It is unclear if these proposals will form part of the final deal.
From just 14 QCOs before 2014, the number has gone up to more than 140 since 2017, a report showed.
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