New Delhi: India’s Commerce Minister Piyush Goyal said on Sunday that Indian goods in the US will have a more competitive edge compared to products from other countries like China, which have higher levies. His comments came days after the US revised the tariff to India to 18 percent from the previous 50 percent.
Earlier this week, India and the US released the framework for the first phase of the bilateral trade pact between both countries. The deal is likely to be signed next month. The minister observed that reciprocal tariffs on India are now the lowest as compared to other countries.
Notably, due to the lowering of tariffs, various sectors like leather, textiles, leather handicrafts, chemicals, and gems and jewellery, will have more competitive prices in the US market as compared to other nations.
How India has a competitive advantage as compared to China in the US
“So, we have to see our competitive advantage over others. And comparatively, India’s RTs amongst our peer countries, emerging market economies, and developing countries are amongst the lowest, Goyal said while speaking to PTI Videos. He added, “So, therefore, we have an advantage over China’s 35 per cent, and we are 18 per cent.”
Speaking of India’s comparative advantage, he noted, “The important thing is competitive advantage. Even when we reduce our tariffs, it’s about competitive advantage.” Dismissing criticism that India conceded too much by accepting the 18 per cent tariff, he added, “I don’t think this is a material issue at all. When some people talk about it or try to highlight this, it only reflects that they don’t understand international trade, and they’re only trying to mislead the people.”
India’s businesses and industry associations have welcomed the deal: Piyush Goyal
Pointing out that Indian businesses, exporters, and industry associations have welcomed the agreement, he added, “They realise the massive trade advantage that this is going to give India. And it will ultimately help our farmers. We are today one of the largest exporters of farm products…we are exporting 55 billion dollars of farm and fish products every year. 5 lakh crores. All of that is income for our farmers…It’ll certainly give them a much bigger value for the farm produce, and farmers’ incomes will increase.”