India, Canada assess trade pact scope

New Delhi: India and Canada are assessing the scope of the proposed trade deal, factoring in the changed global situation since talks stopped in 2023, commerce secretary Rajesh Agrawal said Monday, while stating that govt is exploring the possibility of a preferential trade agreement with Mexico to help Indian exporters avoid paying steep tariffs of up to 50%.

India’s top trade official said that talks were in advanced stages with several trade partners, including New Zealand and the European Union and reiterated that India and the US were “very close” to finalising the framework for their proposed bilateral trade agreement.

He said that negotiations between India and the 27-nation bloc have entered the “most difficult” stage, and both sides are engaged to bridge the differences and close the talks soon. “We are in the most difficult stage, most difficult issues are on the table...we are trying to ease that out wherever we are finding a fine balance. There is a set of issues on the table...CBAM is definitely on the table,” he told reporters, adding that EU’s carbon border adjustment mechanism (CBAM) was also on the discussion table.

Elaborating on the tariff increase for 1,455 products by Mexico, targeted at countries with which the American nation does not have a trade deal, Agrawal said that the move will impact around $2 billion of India’s exports, as against the coverage of $3.8 billion when the proposal was first moved a few months ago. “We are trying to see what is a good way forward and it is easier to sign a preferential trade agreement instead of a bilateral agreement (that covers multiple aspects).”

Asked about the talks with Canada, which have been discontinued, as the two countries seek to normalise ties after hostilities seen during Justin Trudeau’s tenure, Agrawal said chief negotiators of India and Canada will hold discussions this week to find a way forward.



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