What Will The India-US Trade Deal Include?

Discussions about a trade deal between India and the United States have been ongoing for quite some time. An agreement has been reached between the two countries. India has also agreed to an interim trade agreement with the US. Both countries have issued a joint statement in this regard.

So, Let’s Look At The Key Points Of This Trade Deal:

The US has reduced tariffs on Indian goods from 50 percent to 18 percent. This will open up a $30 trillion market for Indian exporters, especially MSMEs, farmers, and fishermen. The increase in exports will create millions of new job opportunities for our women and youth. Under this agreement, the US will reduce reciprocal tariffs on Indian goods to 18 percent. This agreement will provide significant market opportunities in key sectors such as textiles and apparel, leather and footwear, plastic and rubber products, organic chemicals, home decor, handicrafts, and select machinery.

Tariffs will be reduced to zero on a wide range of goods, including generic medicines, gems and diamonds, and aircraft parts. India will receive exemptions on aircraft parts under Section 232, tariff rate quotas on auto parts, and negotiated outcomes on generic pharmaceuticals. India fully protects sensitive agricultural and dairy products, including maize, wheat, rice, soy, poultry, milk, cheese, ethanol (fuel), tobacco, certain vegetables, and meat. Meanwhile, India will eliminate or reduce tariffs on all US industrial goods and a wide range of US food and agricultural products, including dried distillers grains, red sorghum for animal feed, tree nuts, fresh and processed fruits, soybean oil, wines and spirits, and other products.

Both countries are committed to providing each other with continued preferential market access in sectors of their choice. Both countries will establish rules of origin to ensure that the benefits of the agreement accrue primarily to the United States and India. The United States and India will discuss non-tariff barriers that affect bilateral trade. India has agreed to address long-standing impediments to trade in U.S. medical devices and will eliminate restrictive import licensing procedures that delay or impose quantitative restrictions on market access for U.S. information and communication technology goods.

The United States and India intend to discuss their respective standards and conformity assessment procedures for mutually agreed-upon sectors. The U.S. and India agree that if either country modifies its agreed tariffs, the other country may also modify its commitments. Both countries will work towards further enhancing market access opportunities through negotiations under a bilateral trade agreement. The United States and India have agreed to strengthen economic security cooperation to enhance supply chain resilience and innovation, including taking complementary steps to address non-market policies of third parties.

India intends to purchase $500 billion worth of energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal from the United States over the next five years. India and the United States will significantly increase trade in technology products and expand joint technology cooperation, including in graphics processing units and other components used in data centers. The United States and India have resolved to address discriminatory or burdensome practices and other barriers to digital trade. The United States and India will implement this framework immediately and work towards finalizing an interim agreement with the goal of concluding a mutually beneficial bilateral trade agreement.