There has been a new turn in the relations between India and America. A major trade agreement has been signed after a phone conversation between Prime Minister Narendra Modi and US President Donald Trump. President Trump has announced that this deal has come into effect immediately. Under this, the tax on Indian goods has been reduced significantly, due to which Indian businessmen are expected to get big benefits.
How much exemption is given in tariff?
The most important decision in this agreement is the reduction in tariff i.e. import duty. America has reduced the base tariff on Indian products from 25% to 18%. Apart from this, a big relief has been received that the additional penalty of 25% imposed on India for buying Russian oil has been completely removed. Earlier the total tax had reached 50%, which is now only 18%. This rate is now lower than countries like China (34%), Vietnam (20%) and Ethiopia (19%).
What has India promised?
Under this deal, India has also made some big commitments from its side. According to reports, India has said to buy goods worth more than 500 billion dollars (500 billion USD) from America.
India will buy natural gas, crude oil, technology and coal from America. India has agreed to stop buying oil from Russia. India can now look towards America and Venezuela to meet its energy needs. India, on its part, will also reduce tariffs and barriers on American goods to zero.
Foreign Minister’s visit to America
Amidst this agreement, India’s Foreign Minister S. Jaishankar has reached Washington DC. He will participate in the Critical Minerals Ministerial there and discuss strengthening the supply chain. He will also meet US Secretary of State Marco Rubio. The Indian government had recently reduced the duty on capital goods in its budget, which has made it cheaper and easier for American machinery and technology to come to India.
