The trade agreement will help India and the US remain focussed on working together to further deepen economic cooperation, reflecting shared commitment to sustainable growth for our people and businesses, Commerce and Industry Minister Piyush Goyal said on Saturday.
India has reached a framework for an Interim Agreement with the US.
"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," said the minister.
As part of this framework, the US will slash reciprocal tariffs on Indian goods to 18 per cent, providing a huge market opportunity in key sectors such as textiles and apparel, leather and footwear, plastic and rubber products, organic chemicals, home decor, artisanal products, and select machinery in the world's largest economy.
"Additionally, tariffs will go down to zero on a wide range of goods, including generic pharmaceuticals, gems & diamonds, and aircraft parts, thereby further enhancing India's export competitiveness and 'Make in India'," said Goyal.
India will also get exemptions under section 232 on aircraft parts, tariff rate quota on auto parts and negotiated outcomes on generic pharmaceuticals, leading to tangible export gains in these sectors.
"At the same time, the Agreement reflects India's commitment to safeguarding farmers' interests and sustaining rural livelihoods by completely protecting sensitive agricultural and dairy products, including maize, wheat, rice, soya, poultry, milk, cheese, ethanol(fuel), tobacco, certain vegetables, meat, etc," Goyal explained.
"Towards realising Viksit Bharat under PM Modi's guidance," he added.
The framework also opens a path to tariff removal on a wide range of Indian goods. That step depends on the successful conclusion of the Interim Agreement. The list includes generic pharmaceuticals, gems and diamonds, and aircraft parts. These are sectors where India holds a strong global share and US demand is high.
Washington will also remove tariffs on certain Indian aircraft and aircraft parts. Those duties were imposed earlier under national security proclamations tied to aluminum, steel and copper imports.
India will receive a preferential tariff rate quota for automotive parts. These parts are covered by US national security tariffs on automobiles and auto components.
(With inputs from IANS)
