This post was originally published on The Economic Times
US President Donald Trump on February 2 announced a landmark trade deal with India following a call with Prime Minister Narendra Modi, cutting reciprocal tariffs on Indian goods to 18%.
In return, India has committed to eliminating tariffs and non-tariff barriers on select US products, halting purchases of Russian oil, and stepping up imports from the US across energy, technology, agriculture, and coal, with cumulative purchases projected at over $500 billion over time, Trump said in his social media post.
Although the details of the agreement are not known yet, industry stakeholders believe the sharp reduction in US tariffs—from levels that had earlier gone as high as 50%—could provide a strong boost to Indian exports, particularly in labour-intensive sectors, such as textiles, leather, engineering goods, pharmaceuticals, and IT services. Several industry bodies estimate that the move could potentially lift bilateral trade by $100-150 billion annually over the medium term, while supporting employment generation in export hubs dominated by micro, small, and medium enterprises (MSMEs).
Industry Reaction
Calling the announcement encouraging but cautioning against premature celebration, Anil Bharadwaj, Secretary General, Federation of Indian Micro and Small & Medium Enterprises (FISME), said,
— Read the rest of this post, which was originally published on The Economic Times.
