PTI New Delhi

India should negotiate a trade agreement with the US on its own terms, keeping in view the national interest, Economic Advisory Council to the Prime Minister (EAC-PM) Chairman S Mahendra Dev has said. Dev expressed hope that India will have an advantage over other countries on tariffs once the Free Trade Agreements (FTAs) are signed, and it would boost exports.

"The overall approach of India is negotiating trade agreements with countries on its own terms and keeping in view the national interests. The negotiations are going on and the ultimate decision depends on the mutual interests of both countries," he told PTI.

US President Donald Trump has said the proposed trade deal with India would be on the lines of what America has finalised with Indonesia on Tuesday.

Under the US-Indonesia trade pact, the Southeast Asian nation will provide complete access to its market to US products, while Indonesian goods would attract a 19 per cent duty in America. In addition, Indonesia has committed to purchasing USD 15 billion in US energy, USD 4.5 billion in American Agricultural Products, and 50 Boeing jets.

The Indian team is in Washington for the fifth round of negotiations for the proposed Bilateral Trade Agreement (BTA). India has hardened its position on the US demand for duty concessions on agri and dairy products. New Delhi has, so far, not given any duty concessions to any of its trading partners in a free trade agreement in the dairy sector.

India is seeking the removal of this additional tariff (26 per cent). It is also seeking the easing of tariffs on steel and aluminium (50 per cent) and the auto (25 per cent) sectors. Against these, India has reserved its right under the WTO (World Trade Organisation) norms to impose retaliatory duties.

Asked should India has a slightly higher inflation target rate for a growth economy, Dev said, "There is no need to increase inflation target when the present framework is doing well on both inflation and growth objectives." He noted that there are some suggestions that RBI should use core inflation, excluding food for inflation targeting (IT).

"We will have better inflation data from CPI after the revision of base year to 2024," the EAC-PM Chairman said. Dev said the experience of (IT) in the last 10 years shows that Inflation stayed within the band of 2 per cent-6 per cent with some exceptions and inflation declined significantly under IT framework. "It may be noted that higher inflation hurts the poor and middle class mostly. Low inflation is also important for sustainable growth," he said.