India-US Trade Deal: Five Takeaways From the White House Statements |
New Delhi: The White House seems to have again surprised the Indian establishment by coming out with two statements early this morning, before the Indian government could inform its people or parliament. The United States-India Joint Statement and an executive order signed by US President Donald Trump tying India down to being monitored for energy choices entitled, Modifying Duties to Address Threats to the United States By the Government of the Russian Federation.
1. Tariff reduction is not “reciprocal”
The United States’s levy on Indian products stands at 18% now. The statement does not quantify India’s commitment, only saying, “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 for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products.” This means a commitment of zero tariff on some (as yet publicly unspecified) US products from day one. The US also commits to “remove the reciprocal tariff on a wide range of goods” such as “generic pharmaceuticals, gems and diamonds, and aircraft parts” “subject to the successful conclusion of the Interim Agreement”. It should be noted that there was no tariff on Indian pharma exports to the US before Trump became president so this is not a new American ‘concession’. Similarly for aircraft parts. Depending on the specific component’s code, aircraft parts often entered the US in the pre-Trump era with single-digit tariffs or even duty-free........