Finance
As the United States and India reached an interim trade agreement that reduces US tariffs on Indian imports to 18%, Prime Minister Narendra Modi lauded the breakthrough on Saturday, calling it ‘excellent news’ for both countries.
Taking to social media platform X, PM Modi said, “Great news for India and USA! We have agreed on a framework for an Interim Trade Agreement between our two great nations. I thank President Trump for his personal commitment to robust ties between our countries.”
He said the framework reflects the “growing depth, trust and dynamism” of the India-US partnership and will strengthen the ‘Make in India’ initiative.
“This framework reflects the growing depth, trust and dynamism of our partnership. It strengthens ‘Make in India’ by opening new opportunities for India’s hardworking farmers, entrepreneurs, MSMEs, StartUp innovators, fishermen and more. It will generate large-scale employment for women and youngsters,” PM Modi said.
PM Modi further said India and the US share a strong commitment to promoting innovation, and the agreement will deepen investment and technology partnerships between the two countries.
“India and the United States share a commitment to promoting innovation and this framework will further deepen investment and technology partnerships between us. This framework will also strengthen resilient and trusted supply chains and contribute to global growth. As India moves forward towards building a Viksit Bharat, we remain committed to building global partnerships that are future-oriented, empower our people and contribute to shared prosperity,” PM Modi added.
Earlier in the day, Commerce and Industry Minister Piyush Goyal said the trade agreement will help “India and the US remain focussed on working together to further deepen economic cooperation, reflecting shared commitment to sustainable growth for our people and businesses.”
India has reached a framework for an Interim Agreement with the US.
“This will open a $30 trillion market for Indian exporters, especially MSMEs, farmers and fishermen. The increase in exports will create lakhs of new job opportunities for our women and youth,” said the minister.
As part of this framework, the US will slash reciprocal tariffs on Indian goods to 18 per cent, providing a huge market opportunity in key sectors such as textiles and apparel, leather and footwear, plastic and rubber products, organic chemicals, home decor, artisanal products, and select machinery in the world’s largest economy.
“Additionally, tariffs will go down to zero on a wide range of goods, including generic pharmaceuticals, gems & diamonds, and aircraft parts, thereby further enhancing India’s export competitiveness and ‘Make in India’,” said Goyal.
India will also get exemptions under Section 232 on aircraft parts, tariff rate quota on auto parts and negotiated outcomes on generic pharmaceuticals, leading to tangible export gains in these sectors.
“At the same time, the agreement reflects India’s commitment to safeguarding farmers’ interests and sustaining rural livelihoods by completely protecting sensitive agricultural and dairy products, including maize, wheat, rice, soya, poultry, milk, cheese, ethanol(fuel), tobacco, certain vegetables, meat, etc,” Goyal explained.
“Towards realising Viksit Bharat under PM Modi’s guidance,” he added.
The framework also allows for the reduction of tariffs on a wide range of Indian items. That step is contingent on the successful conclusion of the Interim Agreement. The list includes generic medications, gems and diamonds, and aircraft parts. These are sectors in which India has a significant global presence and considerable demand in the United States.
Washington would also eliminate taxes on some Indian aircraft and parts. These taxes were imposed earlier by national security proclamations relating to aluminum, steel, and copper imports.
India will receive a favorable tariff rate quota for automobile parts. These parts are subject to US national security levies on autos and automotive components.
Source: IANS
