India, US To Sign Trade Deal By March, 18% Tariffs Likely To Kick In Next Week: Piyush Goyal

Union Commerce Minister Piyush Goyal said the United States is likely to pass an executive order slashing tariffs on Indian products to 18% from 50%, and both countries are expected to sign the interim trade deal by mid-March.

Speaking to CNBC-TV18, Goyal said exporters can avail reduced tariffs of 18% from the date when the executive order is passed by the Trump administration. He said both sides are working on the legal document of the interim trade deal, and US Trade Representative Jamieson Greer has been invited to New Delhi next month for the signing.

An interim deal between India and the US was announced on Saturday, culminating months of negotiations amid tariff-related tensions. The deal provides for a reduction in reciprocal US tariffs

on Indian goods to 18% from 50% imposed due to India’s Russian oil purchases.

EU, US Deals Will Boost Economy

Goyal asserted that India was the fastest-growing economy and that the trade deals struck with the European Union (EU) and the United States would provide a big boost to the country’s economic growth. He said the industry performance in January was expected to be good as market feedback suggested renewed enthusiasm.

He also said over half of Indian exports to the US would be subjected to zero duties, and 10-15% of Indian products, including steel and aluminium, will be subject to sectoral 232 tariffs up to 50%. Around 35% of Indian exports will be subjected to the reduced 18% tariffs.

Impact Of India-US Trade Deal

Goyal also expressed confidence in huge benefits for India’s textile industry and imports of critical machinery and auto components due to the landmark trade deal. He said India’s leather, footwear, sports goods, furniture, handicrafts and handloom products will get immediate benefits.

Furthermore, Indian exports of farm produce and fish are expected to double from $54 billion to $100 billion. All dairy items, such as poultry, meat, rice, wheat, ragi, sugar, soya, corn, bajra, jowar, maize, banana, green pea, kabuli chana and all GM products are out of the trade deal as they are key to India’s agriculture industry.

Goyal repeated that farmers have been completely protected in the interim trade deal. India will also buy $500 billion worth of US products, particularly GPUs and advanced ICT products. India is also seeking relaxations in supplies of GPUs and Nvidia chips as part of larger trade negotiations.