India chooses trade liberalisation path with US; eyes major tariff cuts

New Delhi: India has decided to pursue a path of trade liberalisation with the US, India's trade secretary said on Tuesday, with the two countries signing the terms of reference for the first part of a bilateral trade deal.

India and the US agreed in February to work on the first phase of a trade deal to be concluded late this year, with a view to reaching bilateral trade worth $500 billion by 2030. "India has decided to go for a path of trade liberalisation with the US," trade secretary Sunil Barthwal told reporters.

The two countries will start virtual discussions on the deal this month, with the next round of in-person talks scheduled for mid-May, added Rajesh Agrawal, an additional secretary in the trade ministry. Reuters reported last month that India is open to cutting tariffs on more than half of US imports worth $23 billion in the first phase of a trade deal the two nations are negotiating, the biggest cut in years.

US President Donald Trump on Wednesday announced a 90-day pause on most tariff hikes for major trading partners, including India, while raising levies on China, providing temporary relief for Indian exporters.

Although Indian Prime Minister Narendra Modi was among the first leaders to visit Washington and hold talks with Trump after he returned to the White House, the US president has continued to call India a "tariff abuser" and "tariff king".

During Modi's US visit in February, the two countries agreed to start talks towards clinching an early trade deal and resolving their standoff on tariffs. The US has a trade deficit of $45.6 billion with India. India has also taken a number of steps to win over Trump including vowing to buy more defence and energy products.