Tariffs Reduced, Access Boosted
A significant step has been taken in the trade relationship between the US and India, with the former agreeing to reduce import duties on Indian goods
down to 18 percent. This crucial development is expected to dramatically enhance the competitiveness of India's engineering sector in the highly lucrative US market. Furthermore, the agreement includes provisions for a preferential tariff rate quota specifically for automotive components, offering a substantial advantage to Indian manufacturers in this segment. This strategic move is anticipated to not only help Indian engineering exporters reclaim lost ground but also to attract new buyers, thereby fostering robust export growth in the immediate future and solidifying market share.
Charting a $250 Billion Future
This newly established trade framework is more than just a short-term win; it directly supports India's long-term vision for its engineering exports. Industry experts and the Engineering Export Promotion Council of India (EEPC) believe this deal is instrumental in achieving the nation's goal of surpassing $120 billion in engineering exports by FY2025-26 and, more importantly, propelling the sector towards the ambitious target of $250 billion in exports by the year 2030. The EEPC has explicitly stated that enhanced access to the US market, the largest global destination for engineering goods, is a critical element in realizing this substantial growth. The council's statement highlighted that the proposed agreement will stimulate domestic manufacturing and create greater opportunities for Indian businesses to penetrate the world's leading economy.
MSME Gains and Future Hopes
The benefits of this trade pact are expected to be particularly pronounced for Micro, Small, and Medium Enterprises (MSMEs) within India's engineering sector, according to the EEPC. These smaller, agile businesses are anticipated to see a considerable uplift in their export capabilities and reach. Looking ahead, the EEPC India has expressed optimism that the interim agreement will pave the way for further discussions and the eventual easing of other duties imposed by the US, such as those under Section 232 on steel, aluminium, and automotive products. A deeper and more comprehensive trade partnership between the two nations is seen as highly advantageous for both economies, promising stronger export expansion and a significant contribution to India's 2030 export aspirations once a full agreement is finalized.
