Latest news with #BTA
Time of India
a day ago
- Business
- Time of India
Indo US BTA: A strategic crossroad for services sector of both economies
In 2024, the U.S.-India trade relationship reached $191 billion, underscoring the growing interdependence between the world's largest and fifth-largest economies. At the heart of this relationship lies a deepening trade in services, especially in IT and professional services. Yet, as both nations work towards a Bilateral Trade Agreement (BTA), the path forward is strewn with strategic opportunities and emerging policy challenges. Synergies in Digital Services between India and USA by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Thanh Pho Ho Chi Minh: Unsold Furniture Liquidation 2024 (Prices May Surprise You) Unsold Furniture | Search Ads Learn More Undo India's total services exports rose by 13.6% to $387.5 billion in FY 2024-25, out of which, exports to the U.S. reached $33.2 billion; led by IT-enabled services ($20 billion), professional services ($10 billion), and BFSI (banking, financial services, and insurance) exports ($2 billion). Conversely, the U.S. exported $25.9 billion in services to India with a surplus of $102 million, primarily from exports in finance and consulting. The digital services sector in particular reflects a symbiotic relationship between the two countries. India today is the third largest start-up hub and one of the leading countries in global SaaS businesses. There is a deep organic relation between Indian and US tech businesses, with 60% of total investments in Indian start-ups in 2020 coming from US investors. Overall, US investors were part of 75% of the deals, followed by Singapore based investors (15%) and Japanese investors (10%). Moreover, major global US tech businesses like Alphabet and Meta have increased their presence in India, making it their second base (or base for their Asia operations) for much of their product development and marketing activities. Live Events Friction Points: Tariffs, Taxes, and Technological Tensions Unfortunately, it has not been smooth sailing for the BTA as2025 has brought fresh headwinds. In April, the U.S. introduced a reciprocal 26% tariff aimed at select sectors—primarily tech and electronics. India's recent decision to remove its 6% equalization levy (digital services tax) was seen as a conciliatory gesture in support of the BTA process, but teething problems still remain. For instance, fundamental differences in data protection frameworks—India's more state-centered model vs. the U.S.' consumer and market-driven approach— are bilateral e-commerce trade reached $15 billion in 2024, but DPDPA compliance costs $500 million yearly for IT exporters. Alignment could boost trade by 15% ($2.25 billion) by 2030. Visa policy is another sore point. Current visa caps cost $800 million in losses and BFSI exports face U.S. regulatory barriers. A WTO study suggests negotiating a 20% increase in H-1B visa quotas could grow India's $10 billion Mode 4 exports by $5 billion, while reciprocal BFSI market access could triple India's $2 billion BFSI exports by 2030. Addressing the dragon in the room Much of these hurdles exist because historically India and USA have often perceived each other as competitors in digital technology and services. However, the BTA finds utility when both countries face a bigger challenge in the form of China. The National Strategy for Critical and Emerging Technologies (2020) by USA recognises China as a major threat in the field of technology. The US is actively seeking to de-couple from China on all fronts; from manufacturing to new technologies. Much of the initial phase of the Indian tech start-up ecosystem was developed by investments from Chinese sources such as Alibaba, Tencent or Didi Chuxing. However, over time there has been a conscious shift by the Indian Government to decouple from Chinese influence which also involved banning certain Chinese service providers. Chinese technology firms are aggressively expanding into Latin America and Africa, offering bundled solutions, low-cost hardware, and subsidized services. China is also fast emerging as a major tech innovator in the new-age technologies such as AI. These developments threaten business interests of both India and USA. India and USA signed a critical treaty under the previous US Administration in the form of United States–India Initiative on Critical and Emerging Technologies (iCET), that sought to leverage complementarities between the two countries in the fields of AI, quantum computing, semiconductors and wireless telecommunications. This initiative, which is critical for both countries to counter the Chinese developments, now needs to be fostered by a BTA that helps realise the stated objectives. Fresh Perspective for the BTA: from competitors to allies The Indo US BTA between the global leaders in the services is no more about turf war between competitors. It is now more about geofencing out the competition from China. Businesses are presently more allied to the idea (as is evident from the degrees of integration); the authorities need to foster it.
Economic Times
a day ago
- Business
- Economic Times
No new tariffs after Bilateral Trade Agreement: India wants US assurance
India seeks assurance from the US in the finalized bilateral trade agreement (BTA) to prevent additional tariffs by the Trump administration. India requests stability in tariffs, concessions for labor-intensive sectors, and a mechanism to address potential tariff increases. Both countries aim to finalize the BTA before the deadline, with India emphasizing the need for sustained trade advantages. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads India wants an assurance from the US that no additional tariffs will be imposed by the Donald Trump administration once the bilateral trade agreement (BTA) is finalised, said people familiar with the matter. The deal is in the final stages of negotiation and both sides are hopeful of reaching accord quickly. India has sought concessions for labour-intensive sectors such as leather and textiles. 'We have put everything on the table,' said one of the persons, adding that India wants stability in tariffs once a deal is rolled agreements typically include renegotiation clauses, or compensation from the partner effecting a tariff increase. India would like the pact to provide for such a mechanism. 'This would ensure the agreement is ring-fenced from prospective changes,' said another person. The US President on April 2 announced a reciprocal tariff of 26% on goods imports from India as part of its trade levies all over the tariffs were paused for 90 days until July 9. However, the baseline tariff of 10% remains in force. India and the US are looking to finalise the BTA ahead of the assurance from Washington is required to ensure tariffs negotiated within the framework of the trade deal remain ring-fenced from any changes effected later by the US, said a third official detailing India's concern. There is also Trump's mercurial experts are agreed on the need for such a clause. 'The BTA should be timebound and not in perpetuity,' said an expert on trade issues. 'India must insist on a clawback provision — that it will withdraw benefits if the US raises tariffs or goes back on any of its commitments.'Officials said Washington has to find a way to reduce tariffs as New Delhi has sought concessions for sectors such as textiles and leather, as mentioned above. The Trump administration currently requires approval from the US Congress to lower levy below most favoured nation (MFN) rates, but it does have the authority to scrap reciprocal tariffs.'We want preferential and sustained trade advantages and have left it to the US to decide the route it takes to reduce its tariff barriers—whether through the Trade Promotion Authority or by seeking Congressional approval,' said one of the officials cited earlier. The government is also monitoring the impact of the 50% tariffs on steel and aluminium and the 25% tariffs on auto. While the auto components sector doesn't expect a big dent for now, there may be an impact if the tariffs persist. According to the official quoted, India will pursue a concession, if others get sides have had several rounds of discussions on the proposed trade deal and are hopeful of concluding at least an early harvest deal. 'We are working on the early tranche, and there is a date (July 9), before which we would like to conclude this. The progress is good,' commerce secretary Sunil Barthwal said on Monday.A US trade team is in India last week to firm up the contours. India has made it clear that any meaningful expansion in bilateral trade will require a significant reduction in US tariffs. Both sides aim to more than double such trade to $500 billion by a Delhi-based trade expert cautioned, 'India should rethink its proposed BTA with the US. The US has a history of incomplete trade deals, such as the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership. It has retracted its WTO commitments also. Moreover, the future of the Indo-Pacific Economic Framework for Prosperity hangs in the balance with the US-China trade deal.'
Yahoo
2 days ago
- Business
- Yahoo
Navigating tariffs and diplomacy: the future of India-US pharmaceutical trade
India and the US are on the verge of a trade agreement that will transform commerce between the two largest democracies in the world. The next few weeks of June and July 2025 will be pivotal for their trade relationship as negotiations enter advanced stages. The goal is to take annual bilateral trade between the two nations to $500 billion by 2030 from the current $190 billion. Both sides are aiming to sign an interim agreement by early July, before US President Donald Trump resumes sweeping global reciprocal tariffs following a 90-day pause. The trade deal between India and the US is not just about tariffs, but as much about geopolitics and maintaining strategic diplomatic ties amid global uncertainty influenced by the Trump administration's radical policies. If successful, India will become the first country to sign a bilateral trade agreement (BTA) of such with the US during President Trump's second term in the White House. The pharmaceutical sector is at the cornerstone of the BTA. The US is India's largest trading partner and the largest export market for Indian-manufactured pharmaceuticals, accounting for 31.35% of India's total pharmaceutical exports. Generic drug products account for the majority of this percentage, such that almost half (47%) of all generics used in the US are imported from India. India imposes a 10% tariff on US pharma imports, while the US does not currently charge any reciprocal duties. The US initially exempted pharmaceuticals from a broader tariff on most imports, providing a temporary reprieve for companies in India. This may change amid President Trump's push to encapsulate pharmaceuticals under its reciprocal tariff policy, for which a 26% levy was announced by the US for Indian imports. The threat of sector-specific duties has weighed heavily on the global pharmaceutical industry, but specifically for India and its generic drug sector. GlobalData has been closely monitoring and analysing the Trump administration's new trade policies, with a specific focus on the impact of future potential pharmaceutical tariffs. As part of the BTA negotiations and in light of the tariff threat, India's pharmaceutical industry has proposed several bold measures to overcome these barriers. Some of these include: • Tariff exemptions for pharmaceuticals • Greater access to technology transfer for research and development • Intellectual property legislation reforms for innovative originator medicines • Relaxed export restrictions • Targeted incentives to promote US manufacturing • Low-cost generic drug supply Several reports indicate that India has made substantial tariff offers and market access concessions to avoid punitive US tariffs. More specifically, the Indian Pharmaceutical Alliance, an organisation representing the country's largest pharmaceutical companies, has urged the government to reduce import tariffs from the current 10% to zero for pharmaceutical imports from the US. The question now is whether India can secure similar terms for its pharmaceutical industry in return, given the close ties between Prime Minister Narendra Modi and President Trump and the critical nature of India's generic drug exports to the US healthcare system. However, there is a consensus that the US may not offer full parity in terms of export control easing, but instead that specific drug categories could possibly be exempted. America's concern over India's intellectual property rights (IPR) has prompted the Indian government to consider reforms of its IP and patent laws. India has proposed strengthening its IPR and its Patents Act to end 'evergreening' by US pharmaceutical companies. India has long resisted foreign pressure to revise its patent laws, despite being part of the Trade-Related Aspects of Intellectual Property Rights agreement. On the more negative side for pharma, India is suggesting reducing the patent exclusivity period for innovative drugs from the current 20-year term to expedite the availability of generics in the country. Since India is already a late-launch market for innovative therapies, the reduction of patent exclusivity periods will further delay their entry and market access. Amid President Donald Trump's stated desire to sharply reduce drug prices on the US market, India has also proposed to supply generic medicines at between 20% and 25% of the current reference branded prices, for three years after originator patent expiry. Following the three years, India will introduce an additional 10% to 15% cost reduction for these products over seven years. Generic products already enter the market at a lower price than the originator, so India is effectively offering a financial incentive that the US could accept, given its reliance on Indian-manufactured generics. It comes amid efforts by Trump to control drug prices through an Executive Order that aims to reduce prescription drug prices by up to 80% under the Most Favored Nation rule, which is essentially international reference pricing (IRP). Aside from tariff exemptions, India is also seeking greater access to critical advanced technologies on par with other countries such as Australia, the UK and Japan, to boost its technological infrastructure and innovation in pharma. The US has already made such concessions for certain allies as part of strategic agreements like the AUKUS (Australia/UK/US) partnership. However, concerns over IPR in India mean that the US would be reluctant towards this provision, instead offering alternative exemptions such as technology transfers for trusted partner programmes or project-specific licences for select Indian companies. One example is the recent launch of the India-US TRUST (Transforming the Relationship Utilizing Strategic Technology) initiative, a BTA that aims to catalyse government-to-government, academia and private sector collaboration in key sectors such as biotechnology. Technology transfer for manufacturing purposes in India will be difficult if Trump imposes import duties on pharmaceuticals. As such, the Indian delegation has proposed increasing US manufacturing by Indian pharma companies of active pharmaceutical ingredients (APIs) and the final stages of drug processing. More specifically, India is seeking targeted incentives for its pharma firms willing to establish API and formulation facilities in the US. The Trump administration's push for domestic pharmaceutical production has already resulted in a surge of investments from global pharma companies, as well as India-based companies aiming to enhance their US manufacturing and research and development capabilities. Since India is one of the top generic manufacturers globally and exporters to the US, this proposal is likely to be considered. "Navigating tariffs and diplomacy: the future of India-US pharmaceutical trade" was originally created and published by Pharmaceutical Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Time of India
2 days ago
- Business
- Time of India
‘Everything on the table…': India eyes duty cuts on both sides; seeks assurance Donald Trump-led US won't impose additional tariffs after trade deal
For India, a primary concern revolves around the process by which the US will reduce duties. (AI image) India-US trade deal: With the Narendra Modi government and Donald Trump administration working to seal the first phase of the bilateral trade agreement at the earliest, India wants assurance that no further tariffs will be imposed. On April 2, the US President Donald Trump declared a reciprocal 26% tariff on Indian goods imports as part of global trade measures. These tariffs were suspended for 90 days until July 9, whilst maintaining the 10% baseline tariff. Both nations are working towards finalising the BTA before the deadline expires. Trade Deal: India Seeks Guarantee From US India has sought guarantees from the US against future tariff impositions by the Trump administration following the completion of the bilateral trade agreement (BTA). The negotiations are nearing completion, with both nations optimistic about swift resolution. India has requested benefits for sectors requiring substantial workforce, particularly leather and textiles. "We have put everything on the table," a source told ET, emphasising India's desire for tariff stability post-agreement. Standard trade agreements incorporate provisions for renegotiation or compensation when partners increase tariffs, and India aims to include similar safeguards. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Alfreton: If You Were Born Between 1940-1975 You Could Be Eligible For This Life Cover Reassured Get Quote Undo "This would ensure the agreement is ringfenced from prospective changes," another source stated. Also Read | 'Dramatic decline…watch out…': China's exports to US dip sharply amid Trump trade war; why India needs to be on the guard Trade specialists unanimously support the inclusion of such a provision. "The BTA should be timebound and not in perpetuity," a trade policy specialist said. "India must insist on a clawback provision — that it will withdraw benefits if the US raises tariffs or goes back on any of its commitments." Government representatives indicated that the United States needs to devise a strategy for tariff reduction, as India has requested concessions for industries including textiles and leather. Whilst the Trump administration presently needs US Congress approval to reduce duties below most favoured nation (MFN) rates, it possesses the authority to eliminate reciprocal tariffs. "We want preferential and sustained trade advantages and have left it to the US to decide the route it takes to reduce its tariff barriers—whether through the Trade Promotion Authority or by seeking Congressional approval," an official said. India's concerns on Trade Deal With US For India, a primary concern revolves around the process by which the US will reduce duties, as the absence of US Fast Track Trade Authority could potentially delay the proposed trade agreement. The US Fast Track Trade Authority serves as a specialised provision enabling the American President to negotiate trade agreements and submit them to Congress for a straightforward vote, without modifications or procedural holdups. A government official indicated that the responsibility lies with US authorities to determine how to address their domestic regulations. Officials said that both countries were examining a distinct combination of products under the proposed agreement, with India seeking reduced-duty access for its labour-intensive goods whilst offering concessions on American automobiles and select agricultural products. Both nations aim to finalise a bilateral trade agreement by September-October. The administration is also assessing the consequences of the 50% duties on steel and aluminium, alongside the 25% duties on automobiles. Although the automotive parts industry anticipates minimal immediate effects, prolonged tariffs could potentially influence the sector. The official mentioned that India intends to seek concessions if they are granted to other nations. India-US trade deal: Early deal on the cards? The government, aiming to secure the first tranche of the bilateral trade agreement with the US before July 9, has said that it seeks "preferential and sustained advantage" through mutual duty reductions. Also Read | Magnet mayhem! Number of Indian companies awaiting licences from China for rare earths doubles; industry supplies hit hard "If trade has to be doubled to $500 billion, both sides have to reduce tariffs for better market access. It should be the endeavour of both countries to lower the tariffs. To what extent they have the legal authority to do so, that will depend upon their outlook towards trade," a senior official told TOI. "We are working on the early tranche and as you are aware that there is a date (July 9), before that we would like to conclude this early tranche,' Commerce secretary Sunil Barthwa said. 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Business Standard
3 days ago
- Business
- Business Standard
G7 Summit in Canada: PM Narendra Modi to meet Carney to 'reset' ties
Apart from Prime Minister Narendra Modi's crucial meeting with his Canadian counterpart Mark Carney, where the two leaders are expected to 'reset' bilateral ties, he is also slated to have meetings with the leaders of Germany, Italy and Ukraine on the sidelines of the Group of Seven (G7) Summit in Canada's Kananaskis. However, Modi will not get an opportunity to discuss the India-US Bilateral Trade Agreement (BTA), which is in the works, with Donald Trump as the US President left the G7 Summit early because of the unfolding tensions in West Asia. New Delhi was hopeful of a Modi-Trump meeting on the sidelines of the Summit, their first since February when the Indian PM had travelled to Washington to meet Trump weeks after the inauguration of the latter's presidency. It was also to be their first meeting after the Pahalgam terror attack and Operation Sindoor that India had launched against terror infrastructure in Pakistan. Trump has repeatedly claimed that he mediated between India and Pakistan to defuse the crisis, and that he used trade as a negotiating tool to clinch a peace deal. India's Ministry of External Affairs (MEA) has consistently disputed these claims. A Modi-Trump meeting was crucial in the context of the two sides trying to conclude the BTA ahead of the July 9 deadline when higher US tariffs take effect. India isn't a member of the G7. Carney invited Modi to attend the Summit given India's size and importance as a major developing economy. Trump held a bilateral meeting with Japanese Prime Minister Shigeru Ishiba at the Summit but failed to reach an agreement on a trade package. The US President also met UK Prime Minister Keir Starmer and signed a document as a follow-up on the trade framework agreed in May. Modi landed in Calgary on Tuesday morning (IST), his first visit to Canada in over a decade. He will take part in the G7 Outreach Summit Session and hold bilateral meetings. 'Landed in Calgary, Canada, to take part in the G7 Summit. Will be meeting various leaders at the Summit and sharing my thoughts on important global issues. Will also be emphasising the priorities of the Global South,' Modi said in a post on X on Tuesday morning. Modi is on a four-day tour to Cyprus, Canada and Croatia. "The PM will be participating in G7 discussions on the future of energy security, including diversification, technology, infrastructure and investment, to ensure access and affordability in a changing world. The PM will also hold several bilateral meetings on the sidelines," MEA Spokesperson Randhir Jaiswal posted on X. Other issues likely to be discussed at the G7 Outreach Summit and during the PM's bilateral meetings with German Chancellor Friedrich Merz and Italian PM Giorgia Meloni include the situation in West Asia, the Russia-Ukraine conflict, and ensuring the supply of critical minerals. According to government sources, a meeting is also planned with Volodymyr Zelenskyy, the Ukrainian President. The Kananaskis gathering on June 16-17 is Modi's 6th consecutive participation in the G7 Summit. The PM is also set to raise the issue of terrorism and seek support of G7 member countries in the context of the Pahalgam terror attack of April 22. Carney's invitation to Modi to attend the Summit signalled the new Canadian government's intent to repair ties with New Delhi that plummeted to an all-time low over the killing of pro-Khalistani separatist Hardeep Singh Nijjar. The two sides are expected to announce a new initiative to combat cross-border crimes.
