US-India Trade Deal: Tariff Reduction to Boost Exports, Says Finance Minister
In a recent development, Finance Minister Nirmala Sitharaman has welcomed US President Donald Trump’s decision to slash tariffs on Indian goods to 18 per cent. She believes that this move will significantly benefit the country’s export sector and lead to a surge in exports.
According to Sitharaman, the reduction in tariffs is expected to provide a much-needed boost to Indian exporters. The Finance Minister expressed her optimism about the positive impact of this decision on the country’s export market during an interview with PTI Videos.
Trump’s previous imposition of steep 50 per cent tariffs had adversely affected Indian exports, causing a decline in competitiveness in the American market. This led to a decrease in orders for sectors such as steel, aluminum, textiles, engineering goods, and agricultural products.
However, with the recent agreement to lower US tariffs on Indian goods to 18 per cent, India’s export industry is poised for a revival. This reduction will align India’s tariff rates with those of other Asian countries, ranging from 15-19 per cent.
Sitharaman emphasized that the details of the trade deal will be disclosed soon, but the tariff cut is a positive development for exporters. She highlighted the importance of exploring new markets to maintain export growth, especially after facing challenges in the US market.
Previous punitive tariffs had caused a decline in India’s bilateral trade surplus with the US. The new tariff rate of 18 per cent will give India a competitive edge over regional rivals like Vietnam and Bangladesh, who face higher tariffs.
Notably, the reduction in tariffs is expected to benefit labor-intensive sectors such as apparel, footwear, and jewelry, which had been severely impacted by the previous 50 per cent tariffs imposed by the US.
In a social media post, Sitharaman hailed the tariff reduction as good news for #MadeInIndia products, highlighting the positive implications for domestic manufacturers.
Trump’s announcement of the tariff reduction is part of a broader agreement that includes India’s commitment to stop purchasing Russian oil and increase imports of various US products over the next five years.
Overall, the tariff reduction is a significant step towards strengthening trade relations between the US and India and boosting India’s export competitiveness in the global market.
