India-US trade deal: With tariffs slashed, here's how it will help

India has announced tariff concessions and market access measures under its trade agreement with the United States covering automobiles agricultural products industrial goods digital trade and select consumer itemsThe government said the pact will significantly improve the competitiveness of Indian exports in the US marketUnder the agreement tariffs on Indian exports worth USD 3094 billion will be reduced from 50 per cent to 18 per cent while reciprocal tariffs on another USD 1003 billion worth of exports will be completely eliminatedldquoThis means a substantial share of Indian goods entering the US market will now face either sharply lower tariffs or dutyfree accessrdquo the government said adding that this will improve price competitiveness for Indian exporters according to PTIAutomobiles alcohol and sensitive sectorsSensitive sectors such as automobiles have been liberalised through quotabased access and duty reductions However the government clarified that no duty concessions have been granted on electric vehiclesAlcoholic beverages have been offered access through tariff reduction combined with minimum import price rules in line with Indiarsquos approach in other free trade agreements Precious metals and other sensitive industrial products are covered under quotabased tariff lowering while medical devices will see long staggered tariff reductionsBig gains for textiles and gemsTextile exports will see tariffs cut from 50 per cent to 18 per cent while silk will receive zeroduty access opening opportunities in a USD 113 billion US marketThe gems and jewellery sector will also benefit with tariffs reduced to 18 per cent for products entering a USD 61 billion market In addition zeroduty access has been secured for diamonds platinum and coins covering a USD 29 billion marketKey beneficiaries include cut and polished diamonds labgrown diamonds coloured gemstones synthetic stones and articles made of gold silver and platinumAgriculture protection for sensitive ItemsIndia currently enjoys a USD 13 billion trade surplus in agricultural trade with the US Under the agreement USD 136 billion worth of Indian agricultural exports will face zero additional US dutyBeneficiary products include spices tea coffee fruits nuts coconut products cereals bakery items cocoa products oilseeds and processed foods such as fruit pulp juices and jamsMarket access has been carefully structured based on product sensitivity Highly sensitive items including meat poultry dairy products genetically modified foods soyameal maize and cereals remain fully protectedSome sensitive products will see partial tariff reductions while others such as almonds walnuts pistachios and lentils will be allowed under tariff rate quotas permitting limited quantities at reduced duties Certain intermediate products used by Indiarsquos food processing industry will see phased tariff elimination over up to 10 yearsIndustrial goods zero duty for key Indian exportsThe agreement provides zero additional duty access for industrial exports worth USD 38 billion Indian products receiving dutyfree access include gems and diamonds platinum clocks and watches essential oils inorganic chemicals paper products plastics wood articles and natural rubberAccess for American industrial goods into India has been structured carefully through immediate cuts phased reductions and quotabased entry depending on product sensitivityDigital trade frameworkIndiarsquos digitally delivered services exports stood at USD 028 trillion in 2024 growing at over 10 per cent yearonyear India ranks fifth globally in digital services exports The government said a structured digital trade framework with the US will reduce regulatory uncertainty lower compliance costs and make crossborder digital services smoother and more predictableWith PTI Inputs