The world’s biggest economy has removed “pulses” from the list of food and agricultural products, revising the statement to say “India will eliminate or reduce tariffs on all U.S. industrial goods and a wide range of U.S. food and agricultural products, including dried distillers’ grains (DDGs), red sorghum, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products.”
The agriculture chapter of the trade agreement released by India mentioned that pulses remain fully protected as a highly-sensitive sector under an Exemption category.
The White House has also revised the India-US trade deal fact sheet to say that India “intends” to buy more American products and purchase over $500 billion of energy, information and communication technology, coal, and other products from the US.
It had earlier said India “will purchase over $500 billion of U.S. energy, information and communication technology, agricultural, coal, and other products.”
The trade deal, announced independently by Prime Minister Narendra Modi and US President Donald Trump, was later elaborated by both sides through a joint statement and fact sheet that listed the details of tariff measures and economic cooperation between the two nations.
Another notable feature of the joint statement released on February 7 was the mention of an “interim agreement” implying that the countries are still negotiating a broader U.S.-India Bilateral Trade Agreement (BTA).Trump slashed the 25% reciprocal tariff on India to 18%, also removing the additional 25% which was imposed citing New Delhi’s purchase of Russian oil.
Agriculture: The key component of the fine print
Under the agreement, US and India have committed to provide each other preferential market access in sectors of respective interest on a sustained basis.
The Indian government has said that tariffs on imports of several agricultural and intermediate products from America will be phased out over a period of up to 10 years under the pact, which will provide adequate adjustment space for domestic players.
Under the agriculture chapter of the agreement, India revealed that this long transition period applies to products used by India’s food processing industry, which are sourced from multiple countries.
“Phased elimination of tariffs over up to ten years has been adopted for certain intermediate products used by India’s food processing industry and sourced from multiple countries. These include albumins; certain oils such as coconut oil, castor oil and cotton seed oil; hoofmeal; lard; stearin; modified starches; peptones and their derivatives; and plants and parts of plants etc. This extended timeline provides adequate adjustment space for domestic stakeholders,” the Press Information Bureau said.
In an interview with ET, Commerce and Industry Minister Piyush Goyal said that the agreement protects all of India’s sensitive interests and provides huge opportunities for our labour-intensive sectors.