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The meeting regarding the Interim Trade Agreement (ITA) between India and America has been postponed. This information was given by news agency PTI quoting government sources.
The meeting was to be held in Washington on 23-26 February. Actually, India was to pay 18% tariff in the agreement, but on Friday, the US Supreme Court canceled all the global tariffs.
After which Trump first imposed 10% tariff on the world on Friday itself, then increased it to 15% within 24 hours.
Now Trump’s 15% global tariff is being implemented, which is less than the deal’s 18%. Due to this, both sides decided that after reviewing these changes, a new date of the meeting will be decided. Due to postponement of the meeting, this trade deal may get delayed.
Trump held a press conference on Friday, 3 hours after the Supreme Court’s decision to repeal the tariffs.
India’s tariff was reduced due to this trade deal
Commerce Minister Piyush Goyal had given information about the trade deal with America in a press conference on 7 February. He had told that Indian agricultural products will be exported to America at zero tariff, whereas American agricultural products have not been given any tariff exemption in India.
Apart from this, India agreed to buy products worth 50 thousand crore dollars (45 lakh 30 thousand crore rupees) from America in the next 5 years. After this the Framework for Interim Trade Agreement (ITA) was released.
Under this, America’s tariff on Indian goods has been reduced from 25% to 18%. Apart from this, 25% additional tariff imposed on India for purchasing oil from Russia was also removed.
How much tariff will be imposed on India
Now due to the change in Trump’s tariff, the question is also being raised regarding the tariff imposed on India whether India will have to pay 18% tariff or 15%. There are two reasons for this-
- President Trump said in a press conference on Friday that there will be no impact on the trade deal with India. It will proceed as before.
- According to a BBC report, a White House official said that countries that have trade deals with the US, including Britain, India and the European Union, will now face a 10% global tariff under Section 122, and not the tariff rate they had previously negotiated. On this basis, after Saturday’s announcement, there will be 15%
If the BBC report is to be believed then the total tariff on India will be reduced from 18% to 15%, whereas Trump’s statement is pointing towards 18% tariff.
India-US trade deal in trouble due to tariff changes
A trade deal was agreed between India and America and the framework for this has been released. Both countries had said that this framework would be implemented soon and negotiations would move towards a comprehensive bilateral trade agreement (BTA).
According to the India-US joint statement, this framework will take forward the India-US BTA negotiations that began on February 13, 2025. This agreement will further include provisions like market access, strengthening the supply chain and reducing trade barriers.
Piyush Goyal had said on February 20 that the agreement was to be finalized by the end of February. It was to be signed in March, whereas this agreement would have been fully implemented from April.
With this, India would have finalized trade agreements with major countries of the world in the coming few months.
Benefits to India from this deal
- Reduction in US Tariffs: US tariffs on Indian goods have been reduced to 18 percent, which will give Indian exporters better access to the US market.
- Zero tariff on select products: Tariffs on generic drugs, gems and diamonds and aircraft parts will be completely eliminated, which will increase competition in these sectors.
- Access to $30 trillion market: US market access for Indian MSMEs, farmers, fishermen, women and youth entrepreneurs.
- Promotion in export areas: New opportunities in textiles, leather and footwear, plastic and rubber products, organic chemicals, home decor, handicrafts and some machinery.
- Section 232 Exemption: Aircraft parts will be exempted under US Section 232.
- Tariff Rate Quota on Auto Parts: America will get special access for some auto components.
- Better terms on generic drugs: Reform of tariff and regulatory rules for Indian generic pharmaceuticals.
India had protected its agriculture and dairy sectors
India The trade deal between India and America was stalled due to agriculture and dairy sector. However, in the framework released in February, India completely protected its agriculture and dairy sectors.
Piyush Goyal had said that India has completely protected agricultural and dairy products like maize, wheat, rice, soya, poultry, milk, cheese, ethanol (fuel), tobacco, some vegetables and meat.
No tariff concession has been given to America on these products. He said that this decision has been taken keeping in mind the income of farmers, food security and rural economy.
However, according to the joint statement, India has agreed to eliminate or reduce import duties on some American agricultural and food products. These include dried distillers grains, red sorghum for animal feed, dried fruits, fresh and processed fruits, soybean oil, wine and spirits.
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