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18% tariff, $500 billion investment and tech boost | 10 takeaways from the India-US trade deal
India was facing a 50 per cent tariff, of which 25 per cent was added as a penalty to New Delhi's purchase of Russian oil.
India and the United States have finalised their interim trade deal, which would bring down tariffs against New Delhi to a final 18 per cent. In the text shared by Union commerce minister Piyush Goyal, the framework between India and the US "represents a historic milestone in our countries’ partnership."
Among some of the key highlights in the interim framework is the reduction of US tariffs on Indian goods. India was facing a 50 per cent tariff, of which 25 per cent was added as a penalty to New Delhi's purchase of Russian oil. Follow live updates here.
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Key takeaways from the interim India-US framework | 10 points
1. Tariffs have been lowered on both sides. The US agreed to reduce its tariffs on India to a final 18 per cent with the India-US trade deal. Furthermore, India will also be removing and reducing tariffs on all US industrial, food and agricultural goods.
2. Once the interim framework is implemented, the US will also end reciprocal tariffs on Indian goods such as medicines, gemstones and diamonds, and aircraft parts.
3.Non-tariff barriers to be addressed will also be addressed with the India-US trade deal to medical devices, agricultural goods and Information and Communication technology goods.
4. India will address the barriers to the trade in US medical devices, eliminate restrictive import licensing procedures that delay market access for, or impose quantitative restrictions on, American ICT goods. Furthermore, within six months of entry into force of this agreement, India will also assess whether US-developed or international standards are acceptable for the purposes of American exports entering the Indian market.
5. India has also agreed to assess its long-standing non-tariff barriers to the trade in US food and agricultural products.
6. As per the framework and US President Donald Trump's announcement on Truth Social, India has agreed to purchase $500 billion of US energy products, aircraft and aircraft parts, metals, coal and technology products for the next five years.
7. Digital trade will also be a key aspect to the trade deal with both countries working to address "address discriminatory or burdensome practices".
8. India and the US will also work towards boosting trade in tech products like Graphics Processing Units (GPUs) for data centres and expand joint cooperation in the technology sector.
9. In case there are any changes to the tariffs imposed on Indian or US goods, the framework calls on both countries to modify commitments accordingly. Both countries will also work to expand market access through negotiations for the BTA.
10. During these negotiations, the US has also affirmed that will be take into consideration its current tariffs against Indian goods and work to see if they can be reduced or scrapped.
