Editor’s Note
This article discusses the newly signed interim trade agreement between India and the United States, a development poised to reduce tariffs and facilitate commerce. The pact is expected to lower costs for exporters, influence consumer prices, and provide a substantial boost to the Indian economy.
A major piece of good news has emerged for Indian exporters and the business community. India and the United States have finally sealed their interim tariff agreement. In simple terms, trade between the two countries will now become easier and cheaper than before. This agreement will have a direct impact on the prices and demand for Indian goods, which is expected to provide a significant boost to the Indian economy.
Under this deal, the US will now apply a stable tariff rate of 18 percent on many goods of Indian origin such as textiles, footwear, plastics, rubber, and machinery. The biggest relief has come for the pharma and jewelry sectors. There is a plan to gradually eliminate duties entirely on generic drugs, diamonds and gemstones, and aircraft parts. Furthermore, the extra taxes that were levied on Indian aircraft parts in the name of security will also now be removed.
Pharmaceuticals: There is huge demand for India’s generic drugs in the US. With reduced taxes, Indian pharmaceutical companies can now expand their presence there on an even larger scale.
Gems and Jewelry: India’s diamond polishing industry is famous worldwide. Now, with increased exports to the US, millions of people working in this sector will benefit and company profits will increase.
Textiles and Apparel: India’s textile industry is a very large and employment-generating sector. With increased competition in the US market, demand for Indian garments will accelerate.
Aviation and Engineering: The removal of duties on aircraft parts will provide global recognition to India’s emerging aerospace and Maintenance, Repair, and Overhaul (MRO) sector. Additionally, exports of heavy machinery and auto components will also increase.
Handicrafts and Home Decor: The handcrafted skills and home decor items made by our artisans will now enhance the beauty of American homes even more, as they will become more affordable for people there.
PHD Chamber of Commerce and Industry (PHDCCI) President Rajeev Juneja praised this historic step.
Dr. Ranjit Mehta, CEO and Secretary General of PHDCCI, commented on the agreement.
