India holds the key to the US market! Piyush Goyal explains the key points of the trade deal that will transform the country's economy
The United States and India have agreed on an interim trade agreement framework aimed at reducing tariffs and promoting economic cooperation. Under this agreement, India will reduce tariffs on American industrial and agricultural products, while the United States will impose reciprocal tariffs on some Indian products, with plans to remove them in the future. Let us explain the key features of this framework...
India and the United States on Friday took a step closer to a historic trade agreement. The two countries released an interim trade deal framework, which aims to reduce tariffs, strengthen energy ties, and deepen economic cooperation.
This move comes as both countries are trying to restructure global supply chains and make trade more resilient. Notably, the India-EU trade deal has been called the "mother of all deals."
This trade deal between India and the United States is being called the "Father of All Deals," as it is a deal between the world's largest economy and the world's largest market.
It is also being said that India will hold the key to the US market in the coming days. Let us also tell you what important points Commerce Minister Piyush Goyal explained that could transform the country's economy.
Joint statement of both countries
The India-US trade deal framework is part of ongoing negotiations towards a comprehensive US-India Bilateral Trade Agreement (BTA) that begins in February 2025. Officials described the agreement as a step towards reciprocal, balanced trade and greater security of supply chains.
What did India agree on?
- What India has agreed to includes eliminating or reducing tariffs on all US industrial goods.
- It also agreed to reduce tariffs on a wide range of US agricultural and food products, including dry grains (DDG), red sorghum for animal feed, nuts, fruits, soybean oil, wine and spirits.
- Providing preferential market access in agreed sectors to promote ease of trade.
America agreed on these things
- It will impose an 18 per cent reciprocal tariff on most Indian goods, including textiles, apparel, leather, footwear, plastics, rubber, organic chemicals, home decor, handicraft products and some machinery.
- The interim agreement, once successfully implemented, will remove reciprocal tariffs on a wide range of Indian goods, covering sectors such as generic pharmaceuticals, gems and diamonds, and aircraft parts.
Steel, aluminum and auto parts
- This framework also addresses tariffs related to US national security regulations.
- Certain duties imposed under Section 232 on Indian aircraft and related aircraft parts made of steel, aluminium and copper will be removed.
- India will get preferential duty rate quota for auto parts.
- The tariffs imposed on the drugs will be reviewed in accordance with the ongoing US Section 232 investigation.
non-tariff barriers
- India has agreed to review long-term barriers affecting imports.
- American Medical Devices.
- Information and Communication Technology (ICT) products.
- Food and agricultural products.
Negotiations will include the adoption of US or international standards and testing regulations in key areas within six months. The two sides will discuss standards and conformity assessment procedures to simplify trade.