The United States is expected to seek increased market access from India in areas such as agriculture, dairy products, ethanol, and medical devices as part of the proposed bilateral trade agreement (BTA) that both nations aim to finalize within the next eight months, according to a news report by Business Standard.
“The US will demand significant concessions in sectors like dairy and agricultural products, ethanol, and the removal of price controls on medical devices. They will not be content with limited tariff reductions on motorcycles and bourbon whiskey. We should push the US to lower duties on labor-intensive products like textiles, leather, and gems and jewelry from 5-7 percent to zero,” a former senior official from the commerce ministry, who participated in negotiations with the Trump administration, told Business Standard.
In the 2024 National Trade Estimate Report on Foreign Trade Barriers, the US Trade Representative (USTR) noted that, despite India’s ambitious ethanol blending targets, the country bans the import of ethanol for fuel use. The Directorate General of Foreign Trade (DGFT) also imposes restrictions on biofuel imports for non-fuel purposes, limiting them to actual users. Since May 2019, the Ministry of Commerce and Industry (MOCI) requires an import license for biofuels and ethanol imports for non-fuel use.
A factsheet released by the White House on Friday stated that while the US remains one of the most open economies globally, its trading partners continue to restrict access to their markets, which contributes to the US’s large and persistent trade deficit. It pointed out that the US applies an average Most Favored Nation (MFN) tariff of 5% on agricultural goods, compared to India’s 39% average MFN tariff. Additionally, India imposes a 100% tariff on US motorcycles, while the US only charges a 2.4% tariff on Indian motorcycles.
The factsheet further emphasized that there are numerous instances where US trading partners fail to offer reciprocal treatment. For example, while the US tariff on ethanol is just 2.5%, Brazil imposes an 18% tariff on US ethanol exports. As a result, in 2024, the US imported more than $200 million worth of ethanol from Brazil, while it exported only $52 million in ethanol to Brazil.
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