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The interim framework of the India-US trade deal has been revealed. This will provide a bigger market and increase opportunities for the exporters of both the countries. This information was given by people associated with the industry on Saturday.

Under this interim framework, America has reduced the tariff on Indian exports from 50 percent to 18 percent. This will benefit the country’s textile, leather and engineering goods industries.

“This framework was agreed upon in the ongoing negotiations to promote two-way trade and lay the foundation for a comprehensive bilateral trade agreement (BTA),” PHDCCI President Rajeev Juneja said.

Under the terms of the interim agreement, the US will impose a tariff rate of 18 percent on goods of Indian origin, including textiles, apparel, leather and footwear, plastics and rubber, organic chemicals, home furnishing, handicraft products and certain machinery.

Juneja said that upon successful implementation and finalization of the interim agreement, tariffs on specific Indian export categories – particularly generic drugs, gems and diamonds, and aircraft parts – are likely to be removed.

The US will also remove some national security- tariffs already imposed on Indian aircraft and aircraft parts under measures to steel, aluminum and copper.

The duty reduction will improve access to the US market for Indian generic drug manufacturers. The gems and jewelery sector is expected to support exports of India’s cutting and polishing industry, thereby increasing profits and export volumes.

Removal of tariffs on aircraft and aircraft parts will benefit India’s emerging aerospace manufacturing, maintenance, repair and overhaul (MRO) and component supply chain.

“The implementation of lower reciprocal tariff rates will enhance the competitiveness of Indian textile and apparel exporters in the US market, especially in labour-intensive sectors,” PHDCCI said.

Reduction in trade barriers will support exports of industrial machinery, auto components and metal products, and organic chemicals, plastics and rubber products will benefit from improved price competitiveness and expanded market access.

Handicraft products, home decor and lifestyle goods are expected to benefit from improved tariff regime and stable access to the US consumer market.

Dr. Ranjit Mehta, CEO and Secretary General, PHDCCI, said, “This interim tariff agreement is an important step in the US-India trade relationship, which is likely to expand market access for exporters from both countries and provide a stable and comprehensive trade framework.”