New York/Washington: India will lower tariffs on a “vast array” of American industrial and agricultural goods, such as “fruits” and “vegetables”, to zero per cent under the trade deal announced by President Donald Trump, a top US official has said.
US Trade Representative Jamieson Greer described the deal as a “big win” while noting that India will continue to control “certain key areas” that enjoy protection.
“This is it. The time has come, and now we have the deal. We’ll finish papering it, but we know the specifics. We know the details. It’s a very exciting opportunity,” Greer told CNBC Squawk Box Tuesday.
Greer said the US will continue to maintain some level of tariff against India – 18 per cent – “because we have this giant trade deficit with them, but they’ve also agreed to reduce their tariffs for us on a variety of agricultural products, manufactured goods, chemicals, medical devices, etc. It’s an exciting opportunity for both countries.”
Separately, White House Press Secretary Karoline Leavitt Tuesday said India has committed to “no longer” purchasing Russian oil, with PM Modi also agreeing on investments of USD 500 billion across key American sectors.
External Affairs Minister S Jaishankar and US Secretary of State Marco Rubio “welcomed” the trade deal and discussed “formalising” bilateral cooperation on critical minerals exploration and mining during their meeting in Washington, DC, Tuesday.
A State Department readout of the meeting said that the two leaders “emphasised the importance of our democracies working together to unlock new economic opportunities and advance our shared energy security goals.”
In a Truth Social post Monday, Trump said that, effective immediately, the two sides agreed to a trade deal under which the US will lower its reciprocal tariff imposed on India from 25 per cent to 18 per cent.
India will “likewise move forward to reduce their tariffs and non-tariff barriers against the US to zero,” he said.
Trump said Modi also committed to buy American goods at a much higher level, in addition to over USD 500 billion of US energy, technology, agricultural, coal, and many other products.
Giving details of the deal, Greer said the average tariff on industrial goods in India is currently around 13.5 per cent. “That’s going to go to zero for virtually everything. When I say virtually, I mean 98-99%. On the agricultural side, there’s a vast, vast array of agricultural goods. So it will go to zero,” he said.
“India, like every country in the world, including the US, has some protection around certain key areas where they’ll continue to control that. We’ll continue to work on access. But for a variety of things, tree nuts, wine, spirits, fruits, vegetables, etc, they’re going down to zero. This is a big win,” Greer said.
In a post on X, the USTR said that “India will lower tariffs on a wide array of US industrial and agricultural goods to 0%. President Trump’s historic deal with India delivers unprecedented market access for American farmers and producers.”
On the non-tariff barriers, he said that getting rid of tariffs is one thing, but often, the non-tariff barriers pose problems.
“So we have an understanding and agreement with the Indians as well on a variety of technical barriers to trade areas where they have not accepted US standards.”
“We know American goods are safe, we know they’re effective, etc. We have effective regulation in the US, sometimes too effective. So we have an agreement with them on a process for recognising certain US standards.
“They obviously have their own political considerations, and they have their own processes for accepting those standards, but that’s a key portion of this trade agreement that should open up this market of over a billion people to US goods,” Greer said.
When asked about Delhi’s Russian oil purchases, Greer said that prior to 2022-23, India really didn’t import Russian crude.
“They took advantage of a situation where Russian crude was trading at a discount because they couldn’t get it to any other countries because of sanctions. President Trump very accurately…put the Indians on notice that we view this as supporting the Russian war effort.
“And starting at the end of last year, the Indians started winding down their purchase of Russian oil. We’ve been monitoring that. They’ve been diversifying purchases of energy from the US, not just oil, but also gas, propane, and other things. That’s been going up. We’ll keep monitoring that,” Greer said.
Leavitt said India is “committed to not only no longer purchasing Russian oil, but buying oil from the US, also perhaps from Venezuela too, which we know will now have a direct benefit on the US and the American people.”
She further said in addition to that, PM Modi “committed to $500 billion of investments into the US, including for transportation, for energy and for agricultural products as well. So this is another great trade deal thanks to President Trump.”
Earlier, speaking to Fox News, Leavitt said President Trump and PM Modi had a “great call” on Monday.
“…when it comes to PM Modi, I know he (Trump) particularly enjoys their relationship and has a deep respect for the Prime Minister and for his country of India. They had a great call. It was very productive yesterday, and they struck a deal in which India has agreed to stop purchasing Russian oil to buy more American oil from the US, and potentially from Venezuela too,” she said.
Leavitt added that Trump and his national security team are “now dictating” the commerce of Venezuela and those oil sales.
She said the US tariff on India will now be at 18 per cent, but American exports to India will face a tariff of zero per cent, so this is a great deal and a huge win for American workers, businesses and consumers alike.”
Trump had imposed 50 per cent tariffs on India, including 25 per cent for Delhi’s purchases of Russian oil.
PTI