India-US deal unlocks USD 30 trillion market

India recently established a historic milestone in its trade agreement with the United States, allowing Indian companies to access one of the largest markets in the world.

The agreement between the two nations enables them to work together on technological development through digital trade and manufacturing operations because it decreases trade tariffs. The development serves as a crucial turning point for exporters from India.

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The agreement gives Indian goods special access to the USD 30 trillion U.S. market, boosting competitiveness.

The agreement aims to provide economic opportunities for multiple essential industries, including textiles, leather, gems and jewellery, agriculture, machinery, home decor and pharmaceuticals, PIB release.

The agreement protects sensitive sectors, including dairy, meat, poultry and specific cereals, to protect farmers and domestic producers.

The United States reduced its tariff rate on Indian textile products from 50 per cent to 18 per cent, and silk remains at 0 per cent.

Indian products like readymade garments, carpets, cotton textiles, and bed linen can now access the USD 113 billion market, boosting exports.

The U.S. market, which has a value of 42 billion dollars now, recognises India as a preferred supplier because its tariffs on leather and footwear exports have decreased from 50 per cent to 18 per cent.

The initiative will create job opportunities while providing vital resources to small enterprises that operate in areas with high labour demand.

Gems, jewellery and home decor

India gains zero-duty access on diamonds, platinum, coins, and home decor products, including chandeliers, lamps, and furniture.

These measures enhance India’s worldwide status as a country that exports high-value products.

Machinery, toys and industrial products

The United States now applies 18 per cent tariffs on machinery exports from the United States now permits access to a market which has a value of 477 billion dollars.

The export rules benefit toys and industrial machinery, and specific auto parts, which create pathways for MSMEs to enter global supply chains.

The agricultural sector requires market expansion while ensuring farmer protection measures. Indian agricultural exports worth USD 1.36 billion now receive zero-duty access for their spices, tea, coffee and fruit and nut products. All sensitive items, which include dairy products, meat and poultry, cereals and millets, will maintain their protective status.

The government will implement gradual tariff cuts for specific products over a period of 10 years to provide farmers with the necessary time to change their operations. The Tariff Rate Quotas (TRQs) system permits limited duty concessions for almonds, walnuts, pistachios and lentils.

The deal is not only about tariffs, but also about the following:

• The two additional elements, which provide better access to high-tech products that include AI chips, semiconductor equipment and medical devices.
• The agreement strengthens India’s digital trade by enabling cross-border IT services and data centre expansion between countries.
• The system permits the entry of intermediate goods, which include industrial machinery, chemicals and raw materials, through competitive pricing.

The strategic method of operation enables India to compete at an international level while protecting its national security and its domestic industrial base.

• The India-US trade agreement establishes a partnership that will bring benefits to both countries.
• The agreement enables India to compete better against other companies in the USD 30 trillion market.
• The agreement enables businesses to export more products while assisting micro and small enterprises.
• The agreement creates new job opportunities and attracts business investments.
• The agreement builds both digital infrastructure and technological research capabilities.

The deal will help India achieve sustainable export growth while developing better international economic partnerships and strengthening its national economic power.