India, US trade pact hinges on Section 301 investigations: Official

PTI

New Delhi

The first phase of the bilateral trade agreement between India and the US can be finalised after the conclusion of Section 301 investigations by America, an official said on Monday.

In March, the US Trade Representative (USTR) launched two unilateral Section 301 investigations against a number of countries, including India, over excess capacity and failures to eradicate forced labour in global supply chains. On June 2, the USTR proposed imposing 12.5% tariffs on 54 countries, including India, for allegedly failing to prohibit the import of goods produced with forced labour. The report of the second probe into excess capacity is awaited. 

The conclusion of the probe is important as the temporary 10% additional tariffs imposed by the US will end on July 24. After that, only the most favoured nation (MFN) tariffs will apply on the trading partners of the US. 

"So if the US want us to pay any additional tax...they have to finish the Section 301 process before that," the official said. 

India is seeking lower tariffs than its competitors, like members of the Association of Southeast Asian Nations (ASEAN)  as well as Sri Lanka and Bangladesh.