US cuts tariffs to 18% as India protects farmers in interim trade framework: FM Sitharaman

India successfully shielded its agriculture and animal husbandry sectors from adverse impacts in the interim trade pact with the United States, Finance Minister Nirmala Sitharaman confirmed on Saturday.

Under the preliminary trade agreement, the US will reduce tariffs on Indian exports to 18%, unlocking significant market potential for textiles, apparel, leather goods, footwear, plastics, rubber products, organic chemicals, home decor items, artisanal goods, and select machinery within the world’s largest economy.

“This framework prioritizes the protection of crucial farm produce, dairy items, spices, and staple foods, bolstering farmer earnings,” stated Sitharaman during her announcement.

The agreement underscores India’s dedication to preserving farmers’ welfare and rural economies by fully safeguarding sensitive agricultural and dairy commodities. Protected items include maize, wheat, rice, soybeans, poultry, milk, cheese, ethanol (fuel), tobacco, certain vegetables, and meat products.

Both nations have committed to granting each other ongoing preferential market access in sectors of mutual interest. Additionally, they will establish stringent rules of origin to ensure primary benefits remain within the US-India trade partnership, according to an official White House release.

“The two countries pledge to eliminate non-tariff barriers hindering bilateral trade. India has also agreed to resolve longstanding obstacles affecting US food and agricultural exports,” the statement clarified.

The White House further indicated that future negotiations for a broader Bilateral Trade Agreement (BTA) would consider India’s request for continued US efforts to reduce tariffs on Indian exports. The framework also grants India crucial exemptions under Section 232 for aircraft components, establishes tariff-rate quotas for auto parts, and secures favorable terms for generic pharmaceuticals, driving measurable export growth in these industries.

Via IANS