US President Donald Trump (R) and Indian 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)
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Indian trade negotiators have rescheduled a planned visit to Washington, D.C., aimed at striking an interim trade deal with the United States, a person familiar with the development told CNBC.
The development came after the U.S. Supreme Court ruled on Friday that President Donald Trump’s tariffs were illegal. Within hours, Trump invoked Section 122 of the Trade Act of 1974, first imposing a 10% import tariff worldwide and then increasing it to 15%.
“The meeting will be rescheduled to a mutually convenient date,” the source told CNBC on Sunday. India and the US said the visit would be “scheduled after both sides have had time to assess the latest developments and their implications.”
CNBC has contacted India’s Ministry of Commerce and Industry for comment.
India’s chief negotiator Darpan Jain and his team were scheduled to begin three days of talks in the United States later this week.
India currently faces reciprocal tariffs of 25%, which were to be reduced to 18%, subject to change, after the two countries agreed to an interim deal earlier this month.
A joint statement issued by the United States and India on February 6 said, “In the event of any changes to the mutually agreed upon tariffs, the United States and India agree that the other country may modify its commitments.”
Ajay Srivastava, founder of the Global Trade Research Initiative and a former Indian trade negotiator, said at this stage it looks like India, like other countries, will face a 15% tariff on top of the most-favored-nation tax rate (usually around 2-3%).
Rethink your strategy
Local media reports said that since the announcement on February 6, both sides had held virtual meetings to discuss the future direction. A face-to-face meeting with US Trade Representative Ambassador Jamieson Greer scheduled for next week was seen as a precursor to finalizing the legal text of the deal between India and the US.
India’s Commerce Minister Piyush Goyal said on Friday that an interim trade agreement between the two countries is likely to be signed in March and come into force in April.
“The 18% tariff negotiations were based on certain assumptions of partial benefits, but now that is gone. Now both sides need to rethink their strategies and the US has to deal with more pressing issues,” Srivastava said.
