New Delhi, February 9 (IANS). Amid the India-US interim trade agreement, a new report says India should prioritize trade openness and necessary reforms to become competitive in the long run.
According to the Systematics report, this requires correcting inverted duty structures, reducing raw material costs by simplifying logistics and customs processes, promoting assembly-based manufacturing for large-scale production and employment, reducing protectionism, increasing free trade agreements (FTAs), strengthening Research and Development (R&D) and easing land, labor and skill issues.
The report said that this joint strategy will lead India towards advanced manufacturing, strongly connect India to the Global Value Chain (GVC) and help in increasing competitiveness in the long term while mitigating the risks associated with Donald Trump’s strict trade policy.
Under the India-US trade agreement, India gets tariff relief and better access to the US market, but in return India will also have to agree to conditions like a commitment of $500 billion of imports and a ban on oil imports.
The India-US bilateral trade agreement signed on February 7, 2026, emphasizes equal market access for both the countries. Under this, India has agreed to reduce or eliminate tariffs on American industrial goods, food items and agricultural products such as Distillers Dried Grains with Solubles (DDGS), red sorghum, dry fruits, fruits, soybean oil, wine and spirits.
In return, America has fixed 18 percent duty on some products like Indian textile, apparel, leather, plastic, chemical and machinery. There is also a plan to remove duties on generic drugs, gems and diamonds and aircraft parts if the interim agreement is properly implemented.
From the US perspective, this framework is designed to maintain trade balance and remove barriers to the US market.
The report says that this deal brings relief in tariffs for India. This will bring the effective duty on Indian products in the US to 18 percent, which is lower than many competing countries. According to the Indian Commerce Minister, this will promote initiatives like employment-based sector, Make in India and self-reliant India.
With this agreement, duties imposed on aircraft and their parts imposed in the name of national security will be removed, special quota will be provided for automobile parts, which will help in the growth of aviation and manufacturing sector.
–IANS
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