India’s foreign minister said on Saturday that trade negotiations with Washington are continuing but there are lines that New Delhi needs to defend, just days before hefty additional tariffs by the United States are due to hit.
Indian goods face additional US tariffs of up to 50 per cent, among the highest imposed by Washington, due to its increased purchases of Russian oil. A 25pc tariff has already come into effect, while the remaining 25pc is set to be enforced from August 27.
A planned visit by US trade negotiators to New Delhi from August 25-29 has been called off, dashing hopes that the levies may be lowered or postponed.
“We have some redlines in the negotiations, to be maintained and defended,” Indian Foreign Minister Subrahmanyam Jaishankar said at an Economic Times forum event in New Delhi, singling out the interests of the country’s farmers and small producers.
India-US trade talks collapsed earlier this year due to India not agreeing to open its vast agricultural and dairy sectors. Bilateral trade between the world’s largest and fifth-largest economies is worth over $190 billion.
“It is our right to make decisions in our ‘national interest’,” Jaishankar said.
Analysts at Capital Economics said on Friday that if the full US tariffs come into force and stick, the hit to India’s economic growth would be 0.8 percentage points both this year and next.
“The longer-term harm could be even greater as a high tariff could puncture India’s appeal as a global manufacturing hub.”
The Indian minister described US President Donald Trump’s policy announcements as “unusual”.
“We have not had a US president who conducts his foreign policy so publicly as the current one and [it] is a departure from the traditional way of conducting business with the world,” Jaishankar said.
He also said Washington’s concern over India’s Russian oil purchases was not being applied to other major buyers such as China and the European Union.
“If the argument is oil, then there are [other] big buyers. If the argument is who is trading more [with Russia], then there are bigger traders,” he said.
Russia-European trade is bigger than India-Russia trade, he added.
The minister also said India’s purchases of Russian oil had not been raised in earlier trade talks with the US before the public announcement of tariffs.
India to suspend postal deliveries to US over tariff confusion
India will temporarily suspend postal deliveries to the United States, the government said today, citing confusion stemming from tariffs imposed by Trump.
India’s communications ministry said the executive order issued last month requires transport carriers or other “qualified parties” approved by US authorities to collect and remit the tariff duties.
But “several critical processes relating to the designation of ‘qualified parties’ and mechanisms for duty collection and remittance remain undefined,” the ministry said in a statement.
“Consequently, US-bound air carriers have expressed their inability to accept postal consignments after August 25, citing lack of operational and technical readiness.”
As a result, India’s department of posts will temporarily suspend bookings of “all types of postal articles” destined for the United States from Monday except letters, documents and gift items of up to $100 in value.
“These exempt categories will continue to be accepted and conveyed to the USA, subject to further clarifications from CBP (Customs and Border Protection) and USPS (United States Postal Service),” the ministry said, adding that “every effort is being made to normalise services”.
The move follows similar steps taken by postal services and mail carriers across Europe. France’s La Poste told AFP it would suspend most package deliveries to the United States from Monday.
It said the new implementation rules were issued by the CBP on August 15, “leaving European postal services with an extremely limited timeframe to get prepared”.
The Trump administration has said that it would abolish a tax exemption on small packages entering the United States from August 29.