The crucial trade deal announced between India and the United States on Monday is now entering the fast track for formalization. Jameson Greer, a close aide to President Donald Trump, unveiled the main terms of this agreement, suggesting a transformative impact on the trade relationships of both countries.
According to Greer, under this agreement, India has agreed to reduce tariffs on industrial imports from the US from the existing 13.5% to zero. This will make American industrial products cheaper within India, supporting enhanced trade between the two nations. However, India maintains a cautious stance towards its agricultural sector.
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In an interview, Greer highlighted India's desire to sustain protection in some sensitive agricultural import segments. Meaning, not all agriculture-related duties will be entirely abolished. Tariffs are set to zero for products like dry fruits, wine, spirits, fruits, and vegetables. However, Reuters indicates that commodities like rice, beef, soybeans, sugar, and dairy remain excluded, differing from the recent India-EU Trade Deal.
US Tariffs Dip from 50% to 18%
The other significant part of the deal involves the US lowering tariffs on most industrial goods from India by 50% to 18%. This reduction anticipates boosting Indian exports within the American market. This strategic move is viewed as a crucial step toward addressing the growing trade imbalance between the two nations.
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Greer further stated that the deal resolves technical barriers, notably in sectors where India previously didn't accept American standards. He mentioned that US products are safe and that a process is being developed to certify standards for better market accessibility, although this will require navigating through India's political and regulatory channels.
The Agreement is Nearing Completion
On energy, Greer noted that India is gradually reducing crude oil imports from Russia and exploring options with the US and Venezuela. While he did not specify when tariff reductions would begin under this trade deal, he assured that the documentation process is in its final stages.
