India-US Trade Agreement: The newly announced trade agreement between India and the United States is expected to strengthen the ‘Make in India’ initiative by creating new opportunities for new youth and businesses. In a joint statement issued on Saturday, the two countries revealed details of the agreement, which will reduce tariffs on Indian goods entering the US from 50% to 18%, significantly expanding access to the US market for exporters.PM Narendra Modi hailed the deal as an important step to deepen economic engagement, strengthen domestic manufacturing and expand employment opportunities. In a post on Twitter, PM Modi said, “Great news for India and America! We have agreed on the framework for an interim trade agreement between our two great countries.” He further said that “This framework reflects the growing depth, trust and dynamism of our partnership.“
Promotion of ‘Make in India’
PM Modi said the deal “strengthens ‘Make in India’ by opening new opportunities for India’s hardworking farmers, entrepreneurs, MSMEs, startup innovators, fishermen and others. It will create large-scale employment for women and youth.”Read this also What is the benefit to the agriculture sector from the India-US trade agreement?Under the agreement, the United States will impose an 18% tariff on goods coming from India. This levy will be applicable on sectors like textiles and apparel, leather and footwear, plastic and rubber items, organic chemicals, home décor, artisan products and some machinery. Further, the agreement also calls for withdrawal of reciprocal duties on a wide list of products including generic pharmaceuticals, gems and diamonds and aircraft parts after the successful conclusion of the interim agreement.
Indian goods are also set to benefit from preferential tariff rate quotas for automotive components, consistent with US national security requirements, under the existing proclamation governing such imports. Additionally, reduction of tariffs to zero on products such as generic drugs, precious stones and aircraft parts is projected to further broaden exports and strengthen the domestic production ecosystem.“Additionally, tariffs on a wide range of commodities including generic pharmaceuticals, gems and diamonds and aircraft parts will be zero, further enhancing India’s export competitiveness and Make in India.”Additional benefits in the package include: exemption under Section 232 for aircraft parts, tariff rate quotas for auto parts and the outcome of negotiations for generic pharmaceuticals. These are expected to provide solid benefits to exporters operating in these sectors.Read live updates HereCommerce and Industry Minister Piyush Goyal said the deal will give Indian exporters access to a $30 trillion market, particularly benefiting MSMEs, farmers and fishermen. He said that higher exports will create lakhs of new employment opportunities for women and youth. He further said, “This agreement will help India and the US focus on working together to further deepen economic cooperation, reflecting our shared commitment to sustainable development for our people and businesses.”As market access expands, New Delhi has also stressed that core agricultural and dairy interests are protected. Sensitive commodities, maize, wheat, rice, soya, poultry, milk, cheese, ethanol (fuel), tobacco, some vegetables and meat will be fully protected, the move is aimed at maintaining rural incomes and livelihoods.
