India-US trade deal
After months of long negotiations, a trade deal was agreed between India and America on Monday. After this diplomatic success, US President Donald Trump spoke to Prime Minister Narendra Modi on phone, after which the tariff imposed on India was reduced to 18%. However, agriculture and dairy have been kept apart from the deal. Union Minister Piyush Goyal said that India will not compromise with the interests of its farmers.
India and America have agreed on a trade deal. Under this, America has reduced the reciprocal tariff imposed on India from 25% to 18%. Apart from this, the 25% penalty duty imposed on India for purchasing Russian oil has also been completely abolished.
What effect will this have on India?
This big reduction in tariff made by America will make Indian exports more cheap and competitive. Labour-based export sectors like textiles, apparel, leather, footwear, gems and jewellery, plastics, machinery, aircraft parts and seafood will benefit the most. This will also create huge employment opportunities.
Fishermen from maritime areas and seafood exporters will also benefit from better tariffs. MSME sector, engineering goods, auto components and small manufacturers will get more entry in the American market. At the same time, sensitive sectors like farming and dairy have been kept out of this deal. That means there has been no change in these sectors and no compromise has been made with the interests of the farmers.
What other benefits will India get?
India has always kept sensitive sectors like dairy, rice, wheat, meat, poultry, cereals, genetically modified foods, soya flour and maize out of the scope of its trade agreements.
On Donald Trump’s statement that India has committed to buy US goods worth US$ 500 billion, including energy, technology, agricultural products, coal and other commodities, sources said the process will be completed in five years and will also include the purchase of aircraft and its spare parts. According to sources, we will import goods worth 50-55 billion US dollars. For data centers alone, we will need goods worth US$20 billion annually.
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