The United States and India have reached an agreement on a new trade deal. US President Donald Trump announced after the declaration that the United States would reduce tariffs on Indian products to 18 percent. The change provides India with better trade conditions than all of its neighboring nations and main export competitors.
Comparison With Other Countries
- India now pays lower tariff rates than most Asian countries because of the revised tariff rates. Bangladesh and Sri Lanka face tariffs of 20 percent, while Pakistan faces a rate of 19 percent. China currently pays much higher tariffs which range from 34 percent to 37 percent.
- India maintains a lower tariff rate than the rates which apply to Indonesia, Vietnam, Thailand, Cambodia, and Malaysia. The European Union, Japan, South Korea maintain 15 percent tariffs while India stays above that rate.
- Some countries pay much higher tariffs than other nations. Brazil faces a 50 percent tariff. Myanmar and Laos both face 40 percent tariffs while South Africa pays a 30 percent tariff.
Lack of Clarity on Implementation
- President Trump confirmed that an agreement exists but he failed to specify when the reduced tariff rates would start. The agreement documentation lacks precise details about India's obligations.
- India's purchase of Russian oil remains shrouded in confusion together with the extent of US products that India intends to purchase. The full terms of the agreement and its implementation schedule have not yet been disclosed.
Political Response
Prime Minister Narendra Modi responded to President Trump’s statement on X, formerly known as Twitter. His response focused on the tariff dispute while he omitted any mention of the complete trade agreement.
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