India To Review Trade Impact Of Israel-Iran Conflict, Eyes Early US Deal
Besides, the official said that India is hopeful of completing an initial trade agreement with the US before July 9 with officials underlining that there has been good progress on the talks.
New Delhi: Amid escalating tension between Israel and Iran, the government on Monday said that it would hold a meeting with shipping lines, container firms, and other stakeholders this week to assess the impact on the country's overseas trade and would address any issue involved in it, according to a top commerce and industry ministry official.
Besides, the official said that India is hopeful of completing an initial trade agreement with the US before July 9 with officials underlining that there has been good progress on the talks. The 90-day pause set by the US president Donald Trump on reciprocal tariffs will come to an end on July 9.
As far as the Iran-Israel conflict is concerned, commerce secretary Sunil Barthwal said that the government is closely monitoring the situation arising from the Iran-Israel conflict. “The impact of the war on India’s trade would depend on how the situation unfolds over a period of time,” he told reporters here.
“We are closely watching the situation and also calling a meeting this week of all the shipping lines, the container organisations and the concerned departments, and stakeholders to understand from them what are the kind of issues they are facing and how we can sort it out,” he said.
Exporters have stated that the war, if escalated further, would impact world trade and push both air and sea freight rates. They have also expressed concerns over the escalation in the conflict and expected to impact movement of merchant ships from the Strait of Hormuz and Red Sea.
Nearly two-thirds of India’s crude oil and half of its LNG imports pass through the Strait of Hormuz, which Iran has now threatened to close. This narrow waterway, only 21 miles wide at its narrowest point, handles nearly a fifth of global oil trade and is indispensable to India, which depends on imports for over 80 percent of its energy needs.
On the US trade deal, the secretary, however, said that India is working on an early trade deal with the US. “The progress has been good. We are hopeful that this will be done within the timeline. There is progress towards the target of finalising the first tranche of the trade deal by the fall of 2025,” he said.
Rajesh Agarwal, special secretary, department of commerce, who is also the chief negotiator for India for the BTA with the US, had also noted that the US team was in India for six days from June 5 to 11. While officials remained tight-lipped over other details of the proposed trade pact, they noted that both countries would have to reduce tariffs and increase market access to meet the target of doubling bilateral trade to $500 billion by 2050.