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After a long-running trade standoff between India and the US, a common agreement now seems to be in place. US President Donald Trump had announced on Monday that America has reduced the 50 percent tariff imposed on India to 18 percent. He had also claimed that now there is a deal between India and America on areas like agriculture and dairy.

Due to the new deal between India and America, the custom duties imposed on Indian goods in America have been reduced significantly. Earlier, the total duty imposed on Indian goods in America was up to 50 percent. 25 percent tariff was imposed by America on India because of trade, 25 percent tariff on buying Russian oil.

In which areas will India benefit?

After Donald Trump’s announcement, now only 18 percent tariff will be imposed on India. India’s labour-intensive sectors like textiles, leather, footwear, marine products, chemicals, plastics, rubber, home decor, carpets and some processed agri products will benefit greatly.

Why is this agreement a profitable deal for India?

Indian exporters will now be in a better position than countries like Bangladesh, Vietnam, Cambodia, because 19-20 percent custom duty has to be paid in America on goods from those countries. India will now have to pay only 18 percent tariff. This will give 1-2 percent gain to Indian exporters. India’s position in the American market will once again become stronger.

Is this deal a disaster for farmers?

Donald Trump has claimed that there will be an agreement with India on agriculture and dairy products also. Prime Minister Narendra Modi has already said that there will be no compromise with the interests of people associated with agriculture and dairy industry. Products like dairy and milk, grains, meat, rice, wheat have been kept out of this agreement. No discount has been given on these.

Will India invest 500 billion dollars in America?

India will maintain its high duty on some agricultural products coming from America, while the duty on less sensitive items will be reduced or reduced to zero. Donald Trump said that India will buy goods worth 500 billion dollars (about Rs 42 lakh crore) from America in 5 years. These will include things like energy, crude oil, LNG, airplanes, high-tech products, semiconductors, AI. India has not yet officially responded to this.

Apart from Trump’s claims, what is India doing?

The central government claims that India has made this trade deal only on the basis of current needs. India has not made any big promises like Trump. Trump has claimed that India will stop buying oil from Russia and will buy more oil from America. India has not confirmed this.

What has the government said so far?

Union Commerce Minister Piyush Goyal said that this deal is a matter of pride for every Indian, because it will give a big boost to labour-intensive sectors and sensitive sectors will be protected. US Trade Representative Jameson Greer also said that India will maintain its agricultural protection and India’s duty on industrial goods will be reduced from 13.5 percent to zero.

Now what next?

Till now, a joint statement on trade has not come out from both the countries, in which all the details are mentioned. The central government has clearly said that this deal will boost India’s exports, but will not cause any harm to the farmers and dairy sector.