‘Sensitive sectors safeguarded’, Pg2

Key Highlights:

• India and the US have agreed to a trade framework that will open a $30 trillion market for Indian exporters, especially MSMEs, farmers, and fishermen.
• The US will reduce tariffs on Indian goods to 18% from 50%, while India will eliminate or cut import duties on US industrial, food, and agricultural products.
• US President Donald Trump removed the additional 25% tariff on Indian goods imposed over Russian oil purchases, subject to monitoring of India's oil imports from Russia.
• India has secured concessions on certain aircraft and aircraft parts, tariff rate quota for automotive parts and generic pharmaceuticals, and has eliminated duty on bikes, automobiles, industrial goods, as well as a wide range of US food and agricultural products.

Detailed Insights:

• The trade framework reaffirms the commitment of both countries to broader US-India Bilateral Trade Agreement (BTA) negotiations.
• India has safeguarded sensitive sectors, including meat, poultry, dairy, GM food products, soy meal, maize, cereals, millets, fruits, and certain animal feeds.
• India intends to purchase $500 billion of US energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal over the next five years.
• India has given market access to American bikes and automobiles, agreeing to zero-duty access to US motorcycle manufacturers for bikes with engine capacities of 800-1,600 cc.
• The two countries will significantly increase trade in technology products, including Graphics Processing Units, and address non-tariff barriers affecting bilateral trade.
• India will address long-standing barriers to the trade in US medical devices and eliminate restrictive import licensing procedures for US Information and Communication Technology (ICT) goods.

Key Concepts Involved:

• Tariff: A tax or duty imposed on goods when they are moved across a customs border.
• Non-tariff barriers: Trade barriers that restrict imports or exports of goods or services through mechanisms other than the simple imposition of tariffs.
• MSMEs: Micro, Small and Medium Enterprises, which are important contributors to economic growth and employment.