In a landmark development signaling a new era of economic partnership, India and the United States have finalized an interim trade agreement. This significant breakthrough, which includes a reduction in US tariffs on Indian goods to 18 percent, has been hailed by Prime Minister Narendra Modi as “great news” for both nations.
PM Modi Thanks Trump, Emphasizes ‘Make in India’ Boost
Taking to social media, Prime Minister Modi expressed his enthusiasm, stating, “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 underscored that this framework is a testament to the “growing depth, trust and dynamism” of the India-US partnership, and will serve as a powerful catalyst for the ‘Make in India’ initiative.
The Prime Minister elaborated on the far-reaching benefits: “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.” He also highlighted the shared commitment to innovation, predicting that the agreement would deepen investment and technology partnerships, strengthen resilient supply chains, and contribute to global growth as India moves towards building a ‘Viksit Bharat’ (Developed India).
Unlocking a $30 Trillion Market: A Game-Changer for Indian Exporters
Commerce and Industry Minister Piyush Goyal echoed the Prime Minister’s optimism, emphasizing the massive market opportunity this agreement unlocks. “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,” Minister Goyal stated.
Key Tariff Reductions and Opportunities:
- 18% Tariff Reduction: The US will slash reciprocal tariffs on Indian goods to 18 percent, creating substantial market access in crucial sectors such as:
- Textiles and apparel
- Leather and footwear
- Plastic and rubber products
- Organic chemicals
- Home decor and artisanal products
- Select machinery
- Zero Tariffs: Tariffs will be reduced to zero on a wide array of goods, significantly enhancing India’s export competitiveness and boosting ‘Make in India’ in categories like:
- Generic pharmaceuticals
- Gems & diamonds
- Aircraft parts
- Strategic Exemptions: India will also benefit from exemptions under Section 232 on aircraft parts, a preferential tariff rate quota on auto parts, and negotiated outcomes on generic pharmaceuticals, promising tangible export gains in these key areas.
Safeguarding India’s Agricultural and Rural Livelihoods
Crucially, the agreement reflects India’s commitment to protecting its farmers’ interests and sustaining rural livelihoods. Minister Goyal confirmed that sensitive agricultural and dairy products, including maize, wheat, rice, soya, poultry, milk, cheese, ethanol (fuel), tobacco, certain vegetables, and meat, will be completely protected within the framework.
This interim agreement not only marks a significant step in strengthening India-US economic ties but also paves the way for potential future tariff removals on an even broader range of Indian goods, contingent on the successful conclusion of the full Interim Agreement. As India advances towards its ‘Viksit Bharat’ vision under PM Modi’s guidance, this trade framework stands as a testament to building future-oriented global partnerships that empower its people and contribute to shared prosperity.
Source: Original Article
