As India and the United States continue negotiations on a bilateral trade agreement, focus is increasingly shifting to the implications of Section 301 of the US Trade Act and the approaching July 24 deadline for finalising the deal. While both sides have expressed optimism about the progress of discussions, experts believe some key issues remain unresolved.
Speaking to ET Now, trade expert Abhijit Mukhopadhyay from CRF said Section 301 is likely to remain one of the most sensitive aspects of the negotiations.
"No country, including India, will want a deal that has the provision to revert back to the status quo... Since the 24th July deadline is hanging over our heads, there will be more concern on the Indian side rather than the American side," he said.
Mukhopadhyay said India is expected to remain cautious about any agreement that allows the United States to restore previous tariff arrangements or invoke broad trade measures under Section 301. Such provisions, he noted, could create uncertainty even after a trade pact is signed.
What Happens if the July 24 Deadline is Missed?
The other key concern is the outcome if negotiators fail to conclude the agreement before the deadline. Mukhopadhyay believes the chances of missing the deadline are limited, but the possibility cannot be ruled out.
"If I have to put a number to it, I will say somewhere around a 10% chance... If it does not happen, we will go back to the original MFN tariff, but the entire Section 301 repercussions will come in," he said.
He explained that failure to meet the deadline could result in the restoration of the existing Most Favoured Nation (MFN) tariff structure, with the possibility of additional tariffs being imposed under Section 301. He also warned that discussions on market access could become stalled if negotiations extend beyond the deadline.
Final Stretch of Negotiations
With both governments signalling that talks are nearing completion, businesses and investors will closely watch the outcome over the coming weeks. While optimism remains high that an agreement can be reached before July 24, the final deal will depend on how both sides resolve differences over tariffs, market access and the broader provisions linked to Section 301.
