India-US Trade Deal Secures Agricultural Protections Amid Tariff Reductions

The India-US trade agreement maintains protections for India's agricultural sector while reducing American tariffs on Indian goods. The deal benefits key sectors like textiles, potentially boosting India's competitive standing. Under the agreement, India commits to purchasing significant US exports, focusing on strategic products including oil, aircraft, and technology.

In a major breakthrough, India's agricultural interests remain safeguarded in the latest trade deal with the United States, which significantly slashes tariffs on Indian goods to 18 percent, a senior official disclosed to ANI on Tuesday.

Despite speculations about India making concessions in agricultural market access, the government has steadfastly adhered to a well-established Free Trade Agreement (FTA) framework. The deal restricts zero-duty access solely to the least sensitive agricultural goods that are typically offered in other FTAs, such as with the UK.

India's formidable position in agricultural trade is underscored by its $1.3 billion surplus with the US, exporting around $3.4 billion in agricultural products annually while importing $2.1 billion. The move promises to bolster India's agricultural exports further while protecting sensitive sectors.

The trade pact also opens up significant advantages for India's labor-intensive export sectors previously subjected to 50 percent tariffs. Textiles, a $10 billion industry in shipments to the US alone, will particularly benefit from reduced tariffs.

Additional sectors gaining from the agreement include leather, marine products, chemicals, and machinery, expanding their competitive edge against countries like Vietnam and China, who face higher tariffs.

A surprising development is the US's withdrawal of the 25 percent tariff on India's Russian crude oil imports, fortifying India's export resilience amid earlier tariff threats.

In return, India agrees to lower duties on high-end automobiles, protecting its local manufacturing while meeting premium market demands. Furthermore, India commits to purchasing $500 billion in American products over five years, focusing on oil, LNG, and high-tech products, enhancing a strategic trade partnership.

Minister Piyush Goyal emphasized the safeguarded interests of the agriculture and dairy sectors, while optimistic about the opportunities set to arise in textiles, leather, and technology, reinforcing India's central role in global supply chains.

(With inputs from agencies.)