India and USA likely to sign trade deal next month: Goyal

New Delhi:India and the US are likely to sign the first tranche of the much-awaited bilateral trade agreement by mid-March, that would lead to Washington lowering import duties on Indian imports, Commerce and Industry Minister Piyush Goyal said on Thursday.

Following the signing of the pact, India will begin reducing import duties on certain goods imported from the US. Goyal also said that the two countries are expected to finalise and sign a joint statement on the first tranche of the bilateral trade agreement within 4-5 days, following which tariffs imposed by America will come down to 18 per cent.

The two countries finalised the agreement earlier this week. Under this, tariffs on Indian goods entering the US will be reduced to 18 per cent from 50 per cent. At present, Indian goods attract 50 per cent import duty, comprising a 25 per cent reciprocal tariff and an additional 25 per cent levy for purchasing Russian crude oil.

“The first tranche of the bilateral trade agreement (BTA) is almost ready, and we expect that in the next 4-5 days, we will finalise and sign a joint statement between the US and India. And based on that, the first phase of this partnership will begin,” he told reporters here. He added that a formal agreement is being drafted, which may take a month or a month and a half, he said, adding it is likely that the formal agreement will be signed by mid-March.

The reduced 18 per cent tariffs on Indian goods will come into effect through an executive order of the US, which would be issued in a day or two after the signing of the joint statement.

Goyal added that there is no investment commitment in this pact. Commerce Secretary Rajesh Agrawal said that the legal agreement will give us the authority to reduce tariffs on American goods.

“Indian tariff reductions (will happen) only after a legal agreement,” Agrawal said, adding Indian tariffs are MFN levies, and American import duties are executive tariffs.