External Affairs Minister S Jaishankar has welcomed the newly announced India-US interim trade agreement, describing it as a pivotal step that opens fresh opportunities for Indian exporters and bolsters the government's Make in India vision.

In a post on X, Jaishankar highlighted how the framework for this Interim Agreement promises a mutually beneficial trade partnership between the two nations. He emphasised that it will deliver greater market access and new avenues to promote domestic manufacturing under Make in India.

The agreement stems from ongoing negotiations for a broader US-India Bilateral Trade Agreement (BTA), which was launched by Prime Minister Narendra Modi and President Donald Trump in February 2025. This interim framework marks a concrete advancement in those talks, as confirmed in a joint statement from the White House and India's Commerce Ministry.

Under the deal, the United States will impose a reciprocal tariff rate of 18 per cent on select Indian-origin goods. These include textiles and apparel, leather and footwear, plastics and rubber products, organic chemicals, home décor items, artisanal crafts, and certain types of machinery.

A key concession from the US side involves the removal of tariffs on specific aircraft and aircraft parts sourced from India. These tariffs had previously been applied citing national security concerns, and their elimination will ease access for Indian aerospace manufacturers.

In return, India has committed to eliminating or reducing tariffs on a broad spectrum of US industrial goods. This extends to a wide array of food and agricultural products, such as dried distillers' grains (DDGs), red sorghum used for animal feed, tree nuts, fresh and processed fruits, soybean oil, wine, spirits, and various additional items.

India has also pledged to procure USD 500 billion worth of US products over the next five years. This ambitious commitment covers energy products, aircraft and aircraft parts, precious metals, technology items, and coking coal, signalling deepened economic ties.

Union Commerce Minister Piyush Goyal echoed this enthusiasm earlier on the same day. He described the framework as a gateway to a USD 30 trillion US market, poised to benefit Indian micro, small, and medium enterprises (MSMEs), farmers, and fishermen in particular.

Goyal further noted that the agreement would drive a significant surge in Indian exports. He projected the creation of lakhs of new jobs, with special advantages for women and youth in export-oriented sectors.

This interim pact aligns seamlessly with India's strategic push for self-reliance through Make in India. By enhancing export competitiveness and attracting investment in manufacturing, it addresses long-standing barriers like high tariffs and non-tariff hurdles in the US market.

For the defence and aerospace sectors—areas of keen interest amid India's indigenous manufacturing drive—the tariff relief on aircraft parts holds immense promise. It could accelerate partnerships with US firms, supporting programs like those from Hindustan Aeronautics Limited (HAL) and private players such as TATA Advanced Systems.

The deal's focus on reciprocal tariffs reflects a balanced approach, avoiding one-sided concessions. India's tariff reductions on US agri-products, for instance, open doors for American exporters while safeguarding sensitive domestic sectors through phased implementation.

Over the five-year horizon, the USD 500 billion procurement commitment underscores India's energy security needs. Imports of US coking coal and energy products will aid steel production and power generation, complementing diversification from traditional suppliers.

Technology products in the procurement basket could spur advancements in defence electronics and aerospace, areas where India collaborates closely with US entities under frameworks like iCET (Initiative on Critical and Emerging Technology).

MSMEs stand to gain disproportionately, with reduced US tariffs on artisanal and labour-intensive goods like textiles and leather. This could revitalise clusters in states such as Tamil Nadu, Uttar Pradesh, and Gujarat, fostering job creation at the grassroots level.

Farmers and fishermen benefit indirectly through expanded market access for value-added products, even as India calibrates agri-imports to protect local produce. Goyal's emphasis on youth and women highlights the deal's potential for inclusive growth.

Jaishankar's reference to "new vistas" captures the optimism. This agreement not only unlocks immediate export gains but positions India as a manufacturing hub, aligning with Atmanirbhar Bharat goals.

As negotiations progress toward the full BTA, stakeholders in defence, aerospace, and manufacturing will watch closely. The pact exemplifies how strategic trade diplomacy can amplify India's global economic footprint.

Based On ANI Report