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The long pending trade deal between India and America has now reached the final stage. A big announcement is expected by the end of November, in which the penalty tariffs imposed on both the countries will be removed. Under the agreement, India will open the market for import of American soybean, corn and selected dairy products.
New Delhi. The India-US trade deal is now considered almost ready after several rounds of discussions, and its formal announcement is expected by the end of November. According to sources, America is ready to withdraw the penalty tariff imposed on India, while India will partially open its market for American agricultural products. Both countries have agreed to reduce the trade tensions that have increased in recent months. Especially after resolving the dispute related to duty on oil purchase from Russia, the way for the agreement has been cleared.
Penalty tariffs will be removed, two-way talks intensified
Officials say that removing the penalty tariff will be an important part of this deal. America had earlier imposed tariffs of up to 50 percent on Indian exports, of which 25 percent was related to oil purchases from Russia. The dispute practically ended after India’s imports from Russia declined in October. Meanwhile, US President Donald Trump also clearly said that both the countries are close to a ‘Fair Trade Deal’, which will give a new direction to energy trade and investment. Both sides are now busy deciding mutual tariff rates, for which two slabs of 12–15 per cent and 15–19 per cent are under consideration.
The way for soybean, corn and dairy products will open
Under the deal, India has agreed to import American soybean and corn duty-free or at reduced duty. This soybean will be in the non-genetically modified category, which India is planning to buy directly from the industry. At the same time, India will use American corn for ethanol production, which will help its domestic energy strategy. However, there will be strict conditions on dairy products – India will allow only limited and processed items, liquid milk will be completely banned. Agricultural imports remained the most sensitive part of these talks, but now agreement has been reached on most of the issues.
Industry, agriculture and energy trade will get new momentum
Both the countries have almost finalized the list of importable products, which will give a new boost to industrial and agricultural trade. Experts believe that this deal will give Indian industries easy access to the American market, while India will become a big consumer market for the American agricultural sector. Energy trade, especially in LNG and crude oil, is also expected to increase. This deal will provide India with better availability of raw materials, while America will get a stable, long-term market. Overall, this trade agreement can be a ‘win-win’ situation for both the economies.
