Assistant US Trade Representative Brendan Lynch and his team had reached India on Monday night for the talks, which were described by sources in the Indian govt not as the sixth round of discussions between the countries on a trade deal, but a 'precursor' to them.
India-US interim trade agreement: Here are the key points
Sharp tariff cuts, zero-duty access for key Indian exports, wider US market entry for multiple sectors, and a boost in bilateral purchases and tech cooperation
India and the US on Saturday (February 7) announced that they have reached a framework for an interim trade agreement under which tariffs on New Delhi will be reduced to 18 per cent.
Here are the highlights:
● US cuts tariffs on Indian goods to 18 per cent, down from 50 per cent earlier.
● The deal is expected to open access to a USD 30 trillion US market, benefitting MSMEs, farmers, and fishermen.
● Higher exports are expected to create lakhs of jobs, especially for women and youth.
● Key Indian sectors likely to benefit include:
● Textiles and apparel
● Leather and footwear
● Plastic and rubber products
● Organic chemicals
● Home décor and artisanal products
● Select machinery
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● Tariffs may fall to zero on several Indian exports, including:
● Generic pharmaceuticals
● Gems and diamonds
● Aircraft parts
India will receive:
● Section 232 exemptions on aircraft parts
● Tariff rate quota on auto parts
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● Negotiated outcomes on generic pharmaceuticals
● India will continue to protect sensitive agriculture and dairy products, including: maize, wheat, rice, soya, poultry, milk, cheese, ethanol (fuel), tobacco, certain vegetables, and meat.
India will eliminate or reduce tariffs on:
● All US industrial goods
● A wide range of US food and agricultural products such as dried distillers’ grains, red sorghum (animal feed), tree nuts, fruits, soybean oil, wine and spirits
● Both countries agreed to provide preferential market access in sectors of mutual interest.
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● Rules of origin will be established to ensure benefits mainly go to India and the US.
● Both sides will address non-tariff barriers impacting bilateral trade.
India agreed to address long-standing issues related to:
● US medical devices
● Restrictive import licensing for US ICT goods
● India and the US will discuss standards and conformity assessment procedures in agreed sectors.
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● If either side changes tariffs later, the other country may modify its commitments.
● Both countries will continue talks toward a broader Bilateral Trade Agreement (BTA).
India plans to purchase USD 500 billion worth of US goods over five years, including:
● Energy products
● Aircraft and aircraft parts
● Precious metals
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● Technology products
● Trade in advanced tech products such as GPUs and data centre equipment will be expanded.
● Both sides will work on digital trade barriers and discriminatory practices.