India-US Trade Deal Amendments Clarify Shared Understanding, Textile Benefits Secured
The Indian government stated on Thursday that recent amendments to the White House fact sheet regarding the framework for an interim India-US trade deal accurately reflect the shared understandings contained in the earlier joint statement. This joint statement served as the foundation for the agreement reached by both nations.
Clarification on Fact Sheet Controversy
The fact sheet, issued days after the joint statement, had sparked controversy as its text appeared to deviate from the statement released on February 7. In response, Ministry of External Affairs spokesperson Randhir Jaiswal emphasized, "Both sides will now work towards implementing this framework and finalising the Interim Agreement." This clarification aims to address concerns and reaffirm the alignment between the two documents.
Textile Industry Benefits Confirmed
Commerce Minister Piyush Goyal announced on Thursday that India will secure concessional duty access for garments manufactured using American yarn and cotton under the trade agreement with the United States. This facility mirrors the benefits extended to Bangladesh.
"Just as Bangladesh enjoys a benefit where, if raw materials are purchased from the US, processed into fabric, and then exported, they are subject to zero reciprocal tariffs, India will also receive the same facility," Goyal explained. He added, "Once our interim agreement is finalised, you will be able to see this clearly in the fine print."
Addressing Industry Concerns
Goyal's remarks come amid concerns within sections of the Indian textile industry following Bangladesh's acquisition of a 19% reciprocal tariff from the US, along with exemptions for garments made using American cotton and man-made fibre. While India's reciprocal tariff stands at 18%, exporters were monitoring whether Dhaka's additional exemption would provide a pricing advantage.
The minister assured that the agreement was meticulously calibrated to protect Indian interests. "Around more than almost all the products grown by Indian farmers, from millets to meat... about 90-95% of products grown by farmers are out of the US trade deal," he stated. "What India needs and what we import even now, and items that will not hurt farmers in India in any way — only those items were opened in a calibrated manner after careful consideration that will ultimately benefit our farmers."
Broader Benefits and Balance
Goyal highlighted that the arrangement would also benefit Indian farmers, as many processed products could access markets in nations with which free trade agreements (FTAs) are signed, such as the US, the European Union, Switzerland, and Norway.
He emphasized that the deal with the US strikes a careful balance between safeguarding sensitive sectors and expanding export opportunities, particularly in labour-intensive industries like textiles and apparel. This clarification is expected to alleviate fears that Indian exporters might be at a disadvantage.
Context from Trade Research
Trade research body GTRI had previously noted that even in Bangladesh's case, the benefit might be limited, as it applies only to the value of US-origin raw material, which typically constitutes a small fraction of Bangladesh's overall garment imports. This perspective adds nuance to the discussion on competitive advantages.
Overall, the government's statements aim to reinforce confidence in the India-US trade deal, ensuring it aligns with national interests while fostering economic growth through strategic partnerships.
