INDO-US TRADE DEAL: Framework for an interim trade agreement
Ind0-US has finalisesd of the framework for an interim trade agreement. Pm Modi welcomed the development.
KEY TAKEAWAYS
India will remove or reduce duties on U.S. industrial goods. It includes many American agricultural and food items.
Products include red sorghum used for animal feed, tree nuts, fresh and processed fruits, soybean oil, wine and spirits, among other.
Indian-origin goods will face tarrif rate of 18% by The United States. Sectors include textiles and apparel, leather and footwear, plastic and others.
After the interin deal US will apply Zero tariffs on select Indian exports. Sectors like generic pharmaceuticals, gems and diamonds and others.
US will also remove national security tariffs on aircraft parts.
The interim agrrement will pave way for broader Bilateral Trade Agreement (BTA)
India has expressed its intent to procure goods and services worth USD 500 billion from the United States.
India’s Policy Response to U.S. Tariffs and Trade Pressures
In the context of trade frictions arising from tariff actions by the United States, India adopted a calibrated and pragmatic strategy.
1. Strategic Energy Imports from the U.S.
India significantly ramped up crude oil imports from the United States. Especially after sanctions constrained other suppliers (Iran, Venezuela).
2. Long-Term LPG Import Agreements
Indian Public Sector Oil marketing companies entered into one-year contracts for importing American LPG.
3. Opening of the Nuclear Sector
- India opened its nuclear power sector to foreign participation, including U.S. firms.
Last month, Meanwhile, India had also concluded a landmark trade pact with the European Union after nearly two decades of negotiation. This “mother of all deals” will slash tariffs on most goods and expand market access on both sides.
These deals come at a time of major global economic and geopolitical shifts. Countries are realigning trade links amid tensions involving major powers, supply-chain restructuring, and efforts to reduce dependence on any single market. India’s new agreements with the US and EU give it greater strategic leverage. It will diversify its export destinations. It will position it as a central player in global trade and investment flows.
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