Bilateral trade between India and the United States is set to enter a new phase as both countries explore a trade deal that may significantly reduce tariffs on Indian exports. Reports indicate that tariff rates could drop to around 15–16%, a move aimed at enhancing market access and strengthening economic ties.
1. Current Tariff Landscape
Many Indian exports currently face tariffs above 20%, especially in textiles, apparel, and certain agricultural products.
High tariffs have historically limited India’s competitiveness in the US market.
Lower tariffs are expected to increase export volumes, benefiting Indian manufacturers and exporters.
2. Key Objectives of the Trade Deal
Boost bilateral trade: Increase the total trade value and reduce trade imbalances.
Strengthen India’s export sector: Particularly textiles, chemicals, and engineering goods.
Address market access barriers: Reduce regulatory bottlenecks and compliance costs for exporters.
3. Potential Impact on Indian Economy
Export growth: Lower tariffs could raise demand for Indian goods in the US.
Job creation: More exports mean higher production and employment in manufacturing sectors.
Foreign investment: Strengthened trade ties can attract US companies to invest in India.
4. Challenges Ahead
Negotiation complexities: Both sides must agree on product coverage, quotas, and safeguard measures.
Domestic political considerations: India may need to balance export incentives with domestic price stability.
Global trade context: WTO norms and third-country competition may influence final terms.
5. Timeline and Expectations
While an official announcement is pending, trade experts expect discussions to conclude in 2025, with phased tariff reductions beginning soon after the agreement is signed.
FAQs:
Q1. Which Indian exports could see tariff reductions?
A1. Textiles, apparel, chemicals, engineering goods, and select agricultural products may see tariffs drop.
Q2. What is the expected tariff rate after the deal?
A2. Reports suggest tariffs could reduce to around 15–16% from current higher levels.
Q3. How will this impact Indian exporters?
A3. Lower tariffs will increase competitiveness, boost exports, and create jobs.
Q4. When will the deal be finalized?
A4. Negotiations are ongoing, with expectations for completion in 2025.
Q5. Are there risks involved in the trade deal?
A5. Yes, including regulatory compliance challenges, domestic price impact, and global competition.
Published on : 22nd October
Published by : SMITA
www.vizzve.com || www.vizzveservices.com
Follow us on social media: Facebook || Linkedin || Instagram
🛡 Powered by Vizzve Financial
RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed
https://play.google.com/store/apps/details?id=com.vizzve_micro_seva&pcampaignid=web_share