US President Donald Trump (R) and India’s Prime Minister Narendra Modi arrive for a joint press conference at Hyderabad House in New Delhi on February 25, 2020. (Photo by Prakash SINGH / AFP) (Photo by PRAKASH SINGH/AFP via Getty Images)
Prakash Singh | Afp | Getty Images
India’s trade negotiators will reschedule their planned visit to Washington, D.C., aimed at firming up an interim trade deal with the U.S., a person familiar with the development told CNBC.
The development comes after the U.S. Supreme Court struck down U.S. President Donald Trump’s tariffs as illegal on Friday. Within hours, Trump invoked Section 122 of the Trade Act of 1974 to first impose a 10% global import tariff, before increasing that to 15%.
The “meeting will be rescheduled at a mutually convenient date,” the source told CNBC Sunday. India and the U.S. are of the view that the visit “be scheduled after each side has had the time to evaluate the latest developments and their implications.”
India’s chief negotiator, Darpan Jain, and his team were scheduled to start the three day-meeting in the U.S. later this week.
India is currently facing a 25% reciprocal tariff, which was due to be cut to 18% after the two sides agreed to an interim deal earlier this month, with room for alterations.
“In the event of any changes to the agreed-upon tariffs of either country, the United States and India agree that the other country may modify its commitments,” read the joint statement issued on Feb. 6, by the U.S. and India.
At this stage, it appears that India, like other countries, will be facing a 15% tariff in addition to the most-favored-nation status rates (usually around 2-3%), said Ajay Srivastava, founder of the Global Trade Research Initiative and a former Indian trade negotiator.
Rethinking strategy
Since the Feb. 6 announcement, both sides had been meeting virtually to discuss the path forward, according to a local media report. The in-person meetings, planned for this coming week, with the U.S. Trade Representative, Ambassador Jamieson Greer, were seen as the precursor to the finalization of the legal text of the agreement between India and the U.S.
India’s Commerce Minister Piyush Goyal said Friday that the interim trade agreement between the two nations would likely be signed in March and implemented in April.
“The 18% tariff negotiations were based on a certain premise of some benefits which is now gone. Now, both sides have to rethink their strategy, and the U.S. has to deal with more pressing issues,” Srivastava said.