America removed penalty on buying oil from Russia. (Image generated by AI)
Jagran Bureau, New Delhi. After the successful completion of the last one year-long talks regarding a bilateral trade agreement between India and America, both the countries issued a joint statement late on Friday night. With this, the 25 percent penalty imposed on India for purchasing oil from Russia was abolished with immediate effect.
America had imposed a duty of 50 percent on Indian exports, of which 25 percent is in the form of penalty and 25 percent is in the form of reciprocal duty. According to the agreement, the 25 percent fee being charged as reciprocal fee will now be reduced to 18 percent. America will issue an executive order in this regard in the next three-four days. Both countries will sign the draft of the agreement by the middle of next month. After that India can again negotiate to reduce the duty to less than 18 percent.
America, a country with an economy of $30 billion, is the world's largest buyer country. India had exported the maximum amount of $ 86 billion to America in the last financial year 2024-25. 40 billion dollars were imported from America. Therefore, America's market is very important for India.
On this occasion, Commerce and Industry Minister Piyush Goyal once again reiterated that the agriculture and dairy sector has been completely protected in the agreement and no such item has been included which may cause any loss to the farmers and small entrepreneurs of the country.
Goyal said that now there will be no duty on Indian exports worth $44 billion in the US market. These include smartphones, generic medicines, gems and diamonds, aircraft parts and many agricultural and bakery items. There will be a duty of 18 percent on exports worth $30 billion and a duty of 50 percent on the remaining $12 billion exports which includes items like steel, aluminium, various parts, but America has imposed a duty of 50 percent on these items for all the countries of the world.
Goyal said that in the US market we compete with countries like China, Indonesia, Bangladesh, Vietnam, all of them have duty of more than 18 percent. Therefore there will be a sharp increase in our exports. We understand that India will soon start exporting 300 billion dollars to the US market.
On the other hand, India has reduced or reduced to zero the duty on various dry fruits including US industrial items and some agricultural commodities. Duty on 800 to 1500 cc capacity bikes like Harley Davidson made in America was completely abolished. Till now, 50 percent duty was levied on Harley Davidson. Import duty on 3000 cc cars will be reduced to 30 percent in a phased manner. But no relief has been given in the import of electric cars.
Tariffs on American alcohol will also be reduced in a phased manner. Relief has been given in the import duty of soybean oil along with cotton and apple, but for the import of American apple, a condition of Rs 80 per kilogram plus 25 percent duty has been kept. This means that apples will not be imported at a price below Rs 100 per kg. The production of long cotton is less in India, which is essential for the textile industry, hence its import has been allowed.
America will export a large quantity of items like computer related items and semiconductor equipment, medical equipment used in examining organs like heart and lungs, and chips. India has not opened its doors to America's genetically modified goods.
Major commodities which will be exported to the American market at zero duty
Smartphones, generic medicines, aircraft parts, gem-diamonds, home decor, inorganic chemicals, silk, watches, many types of seeds, spices, tea, coffee, copra, oil, banana, guava, mango, papaya, mushroom and various other types of vegetables and fruits, pineapple jam, many bakery items and coca related items.
Which items have India not opened to America?
No genetically modified product, meat, poultry, soybean, maize, dairy products, rice, wheat, sugar, millet, millet, ragi, kodo, banana, strawberry, cherry, citrus fruits, green tea, green gram, black gram, oilseeds, honey, ethanol, tobacco.
Which sectors of India's exports will benefit more due to 18 percent duty?
Textiles, leather items and footwear, gems and jewellery, chemicals, toys, sports goods, agricultural and various processed items.
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