A significant trade agreement between India and the United States is set to be announced very soon. Sources close to the negotiations suggest this could happen before the end of November. As part of this deal, the US plans to remove penalty tariffs, and India will open its doors to duty-free imports of important agricultural goods like soyabean and corn. Certain dairy products will also be allowed. This is a major step forward in bilateral trade relations.
The trade deal is expected to offer India more favourable tariff rates compared to many Asian countries. While other nations often face tariffs of 19-20 per cent on similar imports from the US, India is pushing to bring these rates down even further. The aim is to keep them below the European Union’s tariff rate of 15 per cent. Negotiations are currently focusing on setting these reciprocal tariffs. Two possible ranges are being discussed: either between 12 and 15 per cent, or between 15 and 19 per cent. The Indian government is strongly advocating for the lower end of this scale to benefit its industries and consumers.
This agreement addresses a key concern regarding Russian oil. The issue of Russian oil imports has been resolved, and the US President has acknowledged this. Consequently, the penalty tariffs related to this matter are expected to be withdrawn. India’s imports of Russian oil have already seen a reduction in October, with a further significant decrease anticipated from November. This is due to both public and private oil companies in India cutting down their orders following US sanctions on Russian oil firms.
India has also agreed to allow the import of soyabean and corn from the US. The corn imported will likely be used for producing ethanol in India. For soyabean, India plans to buy non-genetically modified varieties directly from the industry. While the US is not pushing for massive soyabean purchases, as China is a major buyer, this arrangement still represents a significant trade flow.
In addition to grains, India will also permit the import of certain dairy products from the US. However, strict safeguards will be in place. The agreement may allow a few specific dairy products, but importantly, it will not include liquid milk. This cautious approach reflects the Indian government’s commitment to protecting the interests of its domestic farmers, which has always been a top priority in trade negotiations. The government has assured farmers that their livelihoods will be safeguarded. The careful selection of imported products and the negotiation of favourable tariffs show a balanced approach to strengthening international trade while supporting local agriculture.
