India revives its ‘zero-for-zero’ push with US betwixt dangling BTA prospect

Just when we thought ‘zero-for-zero’ was gathering dust in the diplomatic archives, India is breathing new life into the idea, and this time, the country is refusing to take no for an answer. Indian industry is rallying for tariff-free trade on aluminium, steel, and autos through a proposed Bilateral Trade Agreement (BTA) with the United States. And aluminium, the often-overlooked metal powering everything from EVs to skyscrapers, is quietly hoping for its moment in the sun.

Image Source: https://www.cfr.org/ 

According to a publication by India’s Ministry of External Affairs, officials suggested that the zero-for-zero offer could potentially aid in fast-tracking the proposed BTA between the bipartisan, which may, in turn, pave the way for rolling back the 26 per cent reciprocal tariff on Indian goods imposed by the US starting April 9.

However, the concession is not exempt from conditions. Sources confirmed that the government plans to impose rigorous rules of origin, requiring at least 30-40 per cent local value addition alongside a change in tariff heading. This condition is aimed at preventing third-country goods from entering the Indian market through the US at concessional duties.

The context: From deadlock to diplomacy 2.0

Let’s rewind a bit. Back in the day, the idea of ‘zero-for-zero’, where two countries mutually agreed to eliminate tariffs on specific industrial goods, was floated by both India and the EU. But the EU’s proposal got a hard pass under the Trump administration. We have traced that dead-end, along with India’s sporadic stance on the prevailing trade relations issues, and why aluminium remained stuck under high US tariffs thanks to Section 232 national security provisions.

Fast-forward to now, and the political winds have shifted. India is refocusing its efforts on a more bilateral strategy, hoping that a one-on-one meeting with the US might yield better results than trying to build consensus in a multilateral sandbox.

Why does aluminium need this win?