New Delhi: American goods ranging from wines and spirits to dry fruits will enter India either duty-free or at reduced import tariffs, a move expected to make these imports cheaper for domestic consumers.
India and the US on Saturday announced that 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.
The framework will be converted into a legal agreement, which is expected to be signed by mid-March. The duty concessions will take effect on the day of implementation.
According to a joint statement, India will eliminate or reduce tariffs 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, and wine and spirits.
The other US goods which will enjoy duty concession by India include walnuts, almonds, pistachios, and some lentils.
New Delhi will also grant duty concession on goods such as high-end cars and motorcycles.
It said that the US and India have also agreed to address non-tariff barriers that affect bilateral trade.
“India agrees to address long-standing barriers to the trade in US medical devices; eliminate restrictive import licensing procedures that delay market access for, or impose quantitative restrictions on, US Information and Communication Technology (ICT) goods,” the statement said.
India needs these ICT goods for its data centres and other industrial activities.
India has also agreed to address long-standing non-tariff barriers to the trade in US food and agricultural products.
Commerce and Industry Minister Piyush Goyal said that India has opened its market under the pact in a “very calibrated” way for American goods.
Minimum import prices have been fixed on certain products like apples to protect interests of MSMEs and farmers, he said.
Under the pact, 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 time. In some sectors, tariffs will be reduced, while in others, quota-based concessions will be provided.
Duty benefits will also be extended by New Delhi on certain American medicines for neuro, heart and diabetes, cosmetics, medical devices, X-ray valves, diagnostic reagents, pacemakers, imaging apparatus, hearing aid, and artificial joints.
American aircraft, semiconductor chips, and high quality machinery will be allowed into India, he said.
On the other hand, India’s exports to the US, including spices, tea, coffee, copra, coconut oil, areca nut, cashew, Brazil nut, chestnut, avocado, banana, guava, mango, kiwi, papaya, pineapple, shiitake mushroom, vegetable planting material and saplings, roots and tubers such as taro, barley, canary seeds, bakery goods, cocoa and cocoa products, sesame seeds, poppy seeds, and fruit jams and pastes, will attract zero reciprocal tariffs in the American market.
Spices, tea, coffee, copra, vegetable wax, areca, chestnut, cashews, several fruits and vegetables exported from India to the US will also attract nil reciprocal tariffs.
