New Delhi, Commerce and Industry Minister Piyush Goyal said on Sunday that Indian goods will have a competitive advantage over products from China and other competing countries in the US market, which faces higher tariffs after the reciprocal tariff was cut to 18 percent.
Indian goods to get concessions in China, other US markets after tariff cut to 18 percent: GoyalIndia and the US have finalized a framework for the first phase of a bilateral trade agreement, which is expected to be signed by mid-March.
Goyal said that the reciprocal tariff towards India is now the lowest compared to its competing countries.
These countries include China, Thailand, Myanmar, Cambodia, Bangladesh, Indonesia, Brazil and Vietnam.
With lower tariffs, India’s labor-intensive sectors, such as textiles, leather and footwear, handicrafts, chemicals, and gems and jewelry, will have more competitive prices in the US market than those countries.
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“So, we have to look at our competitive advantage over others. And comparatively, India’s RTs are the lowest among our peer countries, emerging market economies and developing countries.
“So, therefore, we have an advantage over China’s 35 percent and we are 18 percent,” he told PTI video in an interview.
He added that comparative advantage always gives a country an edge in the global market.
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“The important thing is competitive advantage. Even when we lower our tariffs, it’s about competitive advantage,” he said.
Goyal also rejected criticism that New Delhi had conceded too much by accepting an 18 percent tariff while offering tariff concessions on American goods.
He responded to the question that India has reduced its tariffs, while the US has only reduced its reciprocal tariffs, putting India at a disadvantage.
“I don’t think it’s a material problem at all. When some people talk about it or try to highlight it, it just reflects that they don’t understand international trade and they’re just trying to mislead people,” he said.
He further said that traders, exporters and industry associations have understood these issues and welcomed the agreement.
“…because they have realized the huge trade advantage it is going to give to India. And it will ultimately help our farmers. We are one of the largest exporters of farm produce today… We are exporting farm and fish products worth 55 billion dollars every year. 5 lakh crores. All of this is our farmers’ income… It will definitely give a lot of value to their farm produce, and increase farmers’ income,” said Farmers Income.
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