Prime Minister Narendra Modi and US President Donald Trump
New Delhi:
The United States and India have finalised an interim trade agreement that cuts US tariffs on Indian goods to 18 per cent. As part of the deal, the US has withdrawn the additional 25 per cent duty it had imposed on Indian imports.
Here are 10 points on this big story:
- India will lower or remove tariffs on all US industrial goods and on many US farm and food items like dried distillers' grains, red sorghum for animal feed, tree nuts, fresh and processed fruits, soybean oil, wine, spirits, and more.
- The US will charge an 18% tariff on Indian goods, covering textiles and apparel, leather and footwear, plastic and rubber, organic chemicals, home decor, artisanal products, and some machinery.
- If the Interim Agreement is fully concluded, the US will end the reciprocal tariff on many Indian products, including generic medicines, gems and diamonds, and aircraft parts.
- Separately, the US will also remove tariffs on certain aircraft and aircraft parts from India.
- Both countries will tackle non-tariff barriers that make trade harder, to smoothen business on both sides. India will also fix long-standing hurdles for US medical devices, so these products can enter the Indian market more easily.
- India will scrap restrictive import licensing rules for US ICT (information and communication technology) goods that delay market access or cap quantities.
- India will also address long-standing non-tariff barriers affecting US food and farm products, improving access for those items.
- India plans to buy $500 billion of US goods over the next five years (energy, aircraft and parts, precious metals, tech products, and coking coal).
- Both sides will also boost trade in tech products like Graphics Processing Units (GPUs) for data centres and expand joint tech cooperation.
- India and the US will keep negotiating BTA to open markets further. During those BTA talks, the US will consider India's request to keep lowering tariffs on Indian goods.
