India and the US Collaborate to Enhance Trade Relations by Reducing Barriers
India and the US are collaborating to eliminate trade barriers, aiming for a Bilateral Trade Agreement by 2025. Minister Jitin Prasada announced efforts to increase market access and reduce tariffs, following a ministerial delegation’s visit to the US. Trade discussions could enhance several sectors in India, fostering a balanced economic relationship and targeting $500 billion in bilateral trade by 2030.
The governments of India and the United States are collaborating to eliminate trade barriers, with an emphasis on enhancing market access, reducing both tariff and non-tariff barriers, and improving supply chain integration, as stated by Jitin Prasada, India’s Minister of State for Commerce. This initiative follows a ministerial delegation’s recent visit to the U.S. and aims to culminate in a Bilateral Trade Agreement (BTA) by the fall of 2025.
Minister Prasada clarified in the Lok Sabha that currently, the U.S. has not imposed reciprocal tariffs on India’s exports. This announcement follows a visit led by Commerce Minister Piyush Goyal to the United States and discussions aimed at lowering high tariffs, particularly on automobiles, to promote mutual economic benefits.
The pursuit of a BTA is anticipated to encourage India to reconsider its high tariff rates, which could have positive implications for several labor-intensive sectors in India, such as textiles, gems and jewellery, engineering goods, and marine products. Data from the commerce ministry indicates substantial exports from India in various categories, including engineering goods worth $17.62 billion and electronic goods totaling $10 billion in the fiscal year 2023-24.
The agreement to negotiate the BTA was made during a meeting on February 13 between Prime Minister Narendra Modi and then-President Donald Trump, marking a goal to significantly increase bilateral trade to $500 billion by 2030, termed “Mission 500.” This ambitious plan is supported by a “Memorandum on Reciprocal Trade and Tariffs,” which mandates investigations into the effects of non-reciprocal trade arrangements by U.S. trading partners.
Prasada also mentioned that a comprehensive plan is being developed by the U.S. to ensure fairness in trade relations, pointing out stark differences in tariff rates, for instance, India’s 39% average tariff on agricultural goods versus the U.S. average of 5%. Furthermore, India applies a 100% tariff on U.S. motorcycles, whereas the U.S. imposes only a 2.4% tariff on Indian motorcycles.
In summary, India is striving for a balanced trade relationship, with ongoing dialogue aimed at resolving tariff and non-tariff issues. In 2023, the bilateral trade in goods and services between both nations surpassed $190 billion, indicating a robust economic partnership despite existing challenges, with a trade deficit reported by the U.S. at $43.65 billion.
In conclusion, India and the United States are actively working together to eliminate trade barriers and achieve a mutually beneficial Bilateral Trade Agreement by 2025. This collaboration aims to improve market access, reduce tariffs, and enhance supply chain integrations, particularly in labor-intensive sectors. By addressing existing disparities in tariffs, both nations seek to strengthen their economic partnership and significantly increase bilateral trade by 2030.
Original Source: www.hindustantimes.com
