United States and India Reach Framework for Interim Trade Agreement
On February 7, a joint statement issued by the White House announced that the United States of America and India have reached a framework for an Interim trade Agreement. This agreement is set to bring about reciprocal and mutually beneficial trade between the two nations.
Key Points of the Interim Agreement
Under the terms of the Interim Agreement, the United States will reduce tariffs on India to 18 percent. This agreement is a significant milestone in the partnership between the two countries, demonstrating a commitment to balanced trade based on mutual interests and concrete outcomes.
Trade Terms Between United States and India
As part of the Interim Agreement, India will eliminate or reduce tariffs on various U.S. industrial goods and food and agricultural products. These include items such as dried distillers’ grains, red sorghum, tree nuts, fruit, soybean oil, wine, and spirits.
On the other hand, the United States will apply a reciprocal tariff rate of 18 percent on certain goods from India, including textile, apparel, leather, footwear, plastic, rubber, and more. Additionally, tariffs on specific aircraft and aircraft parts of India will also be removed to enhance trade relations.
Market Access and Non-Tariff Barriers
Both countries have committed to providing preferential market access in sectors of interest. They will establish rules of origin to ensure that the benefits of the Agreement primarily benefit the United States and India. Non-tariff barriers affecting bilateral trade will be addressed, including issues related to medical devices, ICT goods, and standards compliance.
Future Trade Expansion and Cooperation
India has agreed to purchase $500 billion worth of U.S. energy products, aircraft, precious metals, technology products, and coking coal over the next five years. Both nations will focus on expanding trade in technology products, enhancing digital trade rules, and strengthening economic security alignment.
Implementation and Conclusion
The United States and India are committed to promptly implementing this framework and working towards finalizing the Interim Agreement. The goal is to conclude a mutually beneficial Bilateral Trade Agreement (BTA) in line with the agreed roadmap.
