In an announcement on Monday India-US trade agreement And Saturday’s joint statement, along with finer details, remains a big question at $500 billion. when US Customs As the tariff on Indian goods was reduced from 50 percent to 18 percent, it was unclear what India would import from the United States. However, this has now been answered.
US President Donald Trump and Prime Minister Narendra Modi announced the India-US trade deal on Monday. (Reuters)A detailed framework for an interim trade deal was revealed in a joint statement on Saturday, which includes reductions in US tariffs, a commitment by both countries to zero tariffs on selected products, measures to open markets and deepen economic ties overall.
Also Read | What does trade deal with US mean for India? Key points for Delhi in details so farThe trade agreement gives India a competitive edge over other countries such as China, Vietnam, Indonesia, Bangladesh and Pakistan, all of which have higher tariffs than New Delhi.
China’s products carry tariffs of 33 percent, Vietnam and Bangladesh 20 percent, and Indonesia and Pakistan 19 percent. Now, there is an 18 percent tariff on India’s exports alone.
Commerce Minister Piyush Goyal on Saturday called it a “historic” framework and a “very fair, equitable and balanced deal”.
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He said that the world’s largest economy would open up a huge potential for Indian exports, providing opportunities to MSMEs, farmers, fishermen, youth, women and skilled workers in India.
What will India import?In return for the relief that India will get from the US under the trade deal, New Delhi has pledged to buy $500 billion in American goods over five years.
According to the joint statement, India will buy energy products, aircraft and aircraft parts, precious metals, technology products such as artificial intelligence (AI) applications and graphics processing units (GPUs) used in data centers, and coking coal.
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While India intends to purchase these products, the United States accepts the commitment “with best efforts to meet obligations,” the joint statement said.
Also Read | HT Decodes: India-US Joint Statement on Trade Agreements
Commerce Ministry officials point out that most of these are already imported by India, with imports of such products currently worth $300 billion annually, with imports growing at 8 to 10 percent per year. HT reported before
They said the demand for these products, however, could go up to $2 trillion in the coming years, adding that such a thing would make it a “win-win situation”.
India will import products that are not grown in sufficient quantities in the country, Goyal said, while there will also be zero US tariffs on a wide range of agricultural products, which will benefit domestic farmers.
These products include Indian spices, tea, coffee, copra, erica, cashew, chestnut, certain fruits and vegetables, avocado, banana, guava, mango, papaya and pineapple, the minister said.
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How India benefits from the US deal?Reduced tariffs, in particular, mean a lot for labour-intensive sectors like textiles and apparel, leather and footwear, plastics and rubber. These sectors were still trying to wrap their heads around the 50 percent incremental tariffs announced by the trade deal. A 32-percentage-point decline restored the sector’s competitiveness in the US market against rivals in Bangladesh, China and Vietnam.
The trade deal allows for zero tariffs on Indian exports such as gems and diamonds, generic pharmaceuticals and aircraft parts starting in March this year, when the deal will be formally signed.
Also Read | ‘Big thanks’: PM Modi’s first remarks after Trump announces India-US trade dealIndia will also get opportunities for its MSMEs, farmers, fishermen, youth, women and talented and skilled people of the country.
Additionally, New Delhi will get relief under Section 232 on aircraft parts, a preferential duty quote on auto parts, and the outcome of negotiations on generic pharmaceuticals, which will result in tangible export gains in these sectors, Goyal said.
He also said that the structure will present huge opportunities for Indian gems and jewellery, machinery parts, toys, leather and footwear, home furnishings, smartphones and other agricultural products.
Goyal confirmed that the framework has “fully protected” Indian farmers through “carefully crafted exceptions”, protecting sensitive agricultural and dairy products from butter.
‘Mission 500’The focus of the joint statement on the trade agreement shows that work is being done towards the ‘Mission 500’ target, which was announced by Prime Minister Narendra Modi and US President Donald Trump after his visit to the US on February 13, 2025.
‘Mission 500′ aims to more than double total bilateral trade to $500 million by 2030.
Also Read | India will protect farmers’ interests; ‘No concession’ on US soy, milk: Piyush Goyal
Annually “We are on pace to achieve our goal of achieving $500 billion in bilateral trade”, confirmed Goyal.
Further, India and the US also added a safeguard for themselves in the statement, protecting their countries against unilateral decisions on trade.
“In the event of any change in either country’s agreed tariffs, the United States and India agree that the other country may revise its commitments,” ensuring that both sides can respond to protect their interests.
(With inputs from Rajeev Jaiswal, Zia Haque)
