The interim trade deal with the US will boost India’s exports and economy and in no way harms the country’s farmers and small and medium businesses, commerce minister Piyush Goyal emphasised on Saturday.
Agriculture and MSMEs (micro, small and medium enterprises) contribute to 45 per cent of India’s GDP and employ around half of India’s workforce, according to various government estimates.
“Farmers, MSME, handicraft and handloom sector will not lose,” Goyal said at a news conference in New Delhi as he thanked Prime Minister Narendra Modi and US President Donald Trump for a “fair, equitable, and balanced” trade agreement.
The commerce minister listed out the products where US reciprocal tariff has been reduced from 50 per cent to zero.
These include aircraft and machinery parts, pharmaceutical products, elementary auto components, gems, diamonds, platinum, clocks and watches, essential oils, home décor items, inorganic chemicals, rubber and silk.
The move will benefit Indian exporters of textiles and apparel, leather and footwear, plastics and rubber, organic chemicals, home decor and artisanal goods and certain machinery, who have been affected by Trump’s 50 per cent tariff since August last year.
Several farm and food products grown by Indian farmers will also see sharp tariff reductions, with duties dropping to zero in some categories.
These include coconut and coconut oil, avocado, banana, guava, mango, papaya, pineapple, shitake mushrooms, nuts including cashew, vegetables, cereals and select processed food items, among others.
“The thing to celebrate – and is being talked about across the country – is how many farm goods will now enjoy zero duty in America, helping exports. Some people, who oppose Indian farmers and India, are aghast,” Goyal said.
No tariff relief has been extended to the US in genetically modified crops, meat and poultry, soya beans, maize, rice, wheat, sugar, millet, strawberry, citrus fruits, green tea, oilseeds, honey, non-alcoholic beverages, ethanol and tobacco, he stressed.
“India will get 18 per cent duty, but will gain US market access,” Goyal said.
Goyal also said that India stands to gain technological products from the US under the new deal, such as semiconductors that will benefit India’s Artificial Intelligence push.
India and the United States have agreed on a trade framework to reduce non-tariff barriers, align standards and strengthen digital trade, supply chains and economic security based on the talks launched on February 13 last year.
According to the deal, India will now review acceptance of US and international standards within six months and address market access issues affecting medical devices, ICT goods and agricultural products.
Both sides will set rules of origin, safeguard tariff commitments, and work toward common digital trade rules. India plans to purchase $500 billion worth of US goods over five years; negotiations continue for a full bilateral trade agreement.
"In the coming days, as new opportunities and avenues open up, the United States of America, the world’s largest economy, valued at nearly $30 trillion, will open its markets to Indian exporters on a large scale with most-preferred duty access," Goyal said.
"At the same time, the interests of Indian farmers and the dairy sector have been fully safeguarded. Keeping these factors in mind, I believe the India–US Joint Statement, finalised late last night and presented to the world, has been widely welcomed across the country. In fact, this morning I watched a video of a simple handicrafts artisan from Sambhal in Uttar Pradesh, who said, 'The tariff has come down to 18 percent, this is great news for us. We will benefit, new orders will come, and there will be growth'. These were his words, which I heard in a video shared by a journalist on X," he added.