The outline of the trade agreement between India and America has been released. Both the countries have decided the framework of the interim trade agreement and have issued a joint statement on it, which is being seen as a possibility of giving a new direction to the economic relations of the two countries. In this framework of the interim trade agreement, America has made a major reduction in tariffs on Indian products, which is expected to boost exports, employment and MSME sector. On the other hand, India has also maintained the security of sensitive sectors like agriculture and dairy.
In the statement issued, it has been said that the objective of this agreement is to increase trade between the two countries, generate employment and strengthen the economy of both the countries. Under this agreement, America has reduced the tariff on Indian goods from 50% to 18%. This will make it cheaper and easier for Indian companies to sell goods in America. Let us understand the important points of this agreement.
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India-US interim trade agreement important points of
- America has reduced the tariff on Indian goods from 50% to 18%, which will provide a bigger market to Indian exporters.
- Additional tariff imposed on India will end from today.
- America’s nearly $30 trillion market now open to MSMEs, farmers and fishermen.
- Increasing exports will create millions of new jobs, especially for women and youth.
- Tariffs on generic medicines, diamonds and aircraft parts 0% will be.
- Opportunities will increase in textiles, readymade garments, leather, shoes, plastics, rubber, organic chemicals, home decor, handicrafts and some machinery.
- No compromise on wheat, rice, maize, milk, cheese, poultry and other sensitive products.
- Tariffs would be reduced on US agricultural and industrial goods, such as nuts, fruits, soybean oil, wine and animal feed.
- Cooperation in GPUs, other technical goods and digital trade used in data centers will increase.
- Both the countries will together strengthen the supply chain and ensure security from the policies of third countries.
- In the next 5 years, India will buy energy, aircraft, metals, technology and coal worth $500 billion from America.
- The framework will be implemented immediately and work will be done to finalize a full bilateral trade agreement in the future.
Additional tariff imposed on India will end from today
At the same time, America also issued a big statement regarding the additional tariff imposed on India. The Trump administration says that India will no longer buy oil from Russia directly or indirectly. After this, America has removed the 25% additional tax imposed on goods coming from India from February 7, 2026.
Let us tell you that in August last year, America had imposed 25% tax on India because India was buying Russian oil. Now India has also promised America that it will buy American energy products and increase defense cooperation between the two countries in the next 10 years. America says that if India again buys oil from Russia, America can again impose 25% tax.
What is the framework of the interim trade agreement?
In a joint statement issued by both the countries, it has been said that India and America will immediately implement the framework decided for the interim agreement and will work towards finalizing it. In a statement issued by the White House, it was said that this framework reiterates the commitment of both the countries to comprehensive bilateral trade negotiations. This initiative is the next phase of trade talks initiated by US President Trump and Prime Minister Narendra Modi. The agreement aims to create a balanced and mutually beneficial trading system.
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No compromise in agriculture and dairy sectors, what did Goyal say?
In this agreement, India has protected its agricultural sector and dairy sector. Regarding this, Piyush Goyal clearly said that in the agreement, India has completely protected its sensitive agricultural and dairy products. Corn, wheat, rice, soy, poultry, milk, cheese, ethanol, tobacco, some vegetables and meat products have been protected. The government says that this will not have any negative impact on farmers and rural livelihoods. Along with opening up trade, priority has been given to protecting domestic interests.
Which sectors will benefit greatly?
It is noteworthy that many industries will get direct benefits from this agreement. This includes textiles and readymade garments, leather and footwear, plastic and rubber products, chemicals, home decor and handicrafts and machinery sectors. Apart from this, tariff on generic medicines, diamonds, gems and aircraft parts will be reduced to zero.
