- India and the US have reached a trade deal with major tariff reductions on US industrial goods and agriculture
- India will cut import duties on tree nuts, fruits, soybean oil, wine, spirits, and animal feed components
- India commits to purchasing $500 billion of US goods over five years in energy, aircraft, metals, and tech
In a landmark moment for the Indian economy and commerce, the nation has officially reached a trade deal with the United States, committing to a series of sweeping reductions of trade barriers, which have been in place for years. The nation has particularly reduced tariffs on all US industrial goods and a broad spectrum of agricultural products.
Some of the key US products could include tree nuts, fresh and processed fruits, soybean oil, and spirits. India has also committed beyond just tariff cuts for key goods; New Delhi is also dismantling the long-standing non-tariff hurdles, including a promise to streamline restrictive import licensing for Information and Communication Technology (ICT) goods and addressing regulatory "pain points" for U.S. medical devices.
Moreover, India has intended to purchase $500 billion worth of US goods over the next five years, as was hinted by Donald Trump when he announced the breakthrough earlier this week.
NDTV Profit takes you through some of the key commitments India has made as part of the trade deal.
Major Tariff Reductions and Market Access
The biggest boost for the United States from this trade deal will be India's removal of import duties on a wide range of food and agriculture products. As mentioned earlier, the Indian markets will further expand to US tree nuts, fresh and processed fruits, soybean oil, wine and spirits.
Meanwhile, India has also agreed to lower barriers for animal feed components, specifically dried distillers' grains and red sorghum.
A $500 Billion Purchase Commitment
The biggest takeaway from this deal, apart from the US lowering tariffs to 18%, has been India's announcement to purchase $500 billion-worth of US goods over the period of five years.
This massive procurement plan will cover sectors such as energy products and coking coal, commercial aircraft and aircraft parts, precious metals and high-end technology products.
The two nations have notably decided to expand their trade in Graphics Processing Units (GPUs), a key hardware for making AI models and running data centres. US-based companies Nvidia, the largest in the world and AMD, are the manufacturers of GPUs.
Dismantling Non-Tariff Barriers
Apart from import duty cuts, India has agreed to overhaul long-standing regulatory hurdles that have historically frustrated US firms.
As part of this exercise, India will address barriers to trade in US-made medical equipment and medical devices. The national government has also vowed to eliminate restrictive licensing procedures in ICT goods that have previously delayed market access.
ALSO READ: India-US Trade Deal: Reciprocal Tariffs Back To 18% And More — Here's What United States Has Committed To
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