WASHINGTON/ NEW DELHI: India and the US on Saturday announced they have reached a framework for the first phase of the bilateral trade agreement under which both sides will reduce import duties on a number of goods to boost two-way trade.
While the US will reduce tariffs on Indian goods to 18% from the present 50%, India will eliminate or cut down import duties on all US industrial goods and a wide range of American food and agricultural products, including dried distillers’ grains, red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits.
The first phase of the pact is expected to be signed by mid-March. Implementation of the pact will lead to concessions and the elimination of duties on American goods by India.
The US, through a separate executive order, has eliminated the 25%tariffs on India for purchasing Russian oil from February 7, as New Delhi has committed to stopping directly or indirectly importing oil from Moscow. Trump’s order has said that the US officials will monitor whether India resumes directly or indirectly importing Russian oil.
If it finds that India has resumed directly or indirectly importing the oil, the US officials shall recommend “whether and to what extent I should take additional action as to India, including whether I should reimpose the additional ad valorem rate of duty of 25% on imports of articles of India,” the order said.
The reciprocal tariff of 25% will be reduced to 18% after the US issues an executive order in this regard, which is expected soon.
The statement also said that India has expressed its intention 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 will eliminate import duties on certain US goods on the day the agreement comes into force, while duties on other items may be phased out over timePiyush Goyal, Commerce Minister