India-US Deal in Nov; India to Import US Soyabean, Corn and Certain Dairy Products

Chennai: The US-India Bilateral Trade Agreement will be announced before the end of this month after the US withdraws the penalty tariff. India will allow duty-free import of soyabean, corn and certain dairy products. The reciprocal tariffs will be less than 19-20 per cent applicable for several Asian countries, but India is insisting on bringing it down below the European Union’s tariff rate of 15 per cent. “The deal is expected to be announced before the end of November. The Russian oil issue is well-settled, and US President Donald Trump also has acknowledged it. So, the penalty tariffs will be withdrawn,” said sources privy to the negotiations. India’s imports of Russian oil have come down in October and from November a sharp fall is expected as both public and private refiners have cut down orders following the US sanctions on Russian oil companies. “Negotiators are currently finalizing the reciprocal tariffs. Two options are being discussed. It could either be between 12 and 15 per cent or between 15 and 19 per cent. The India side is pushing for the lower rates,” he said. Most of the Asian countries, which had entered trade deals with the US earlier, have tariff rates at 19-20 per cent. India will have a better rate compared to the Asian peers, whichever option is finalized. However, India is pushing for a rate between 12 and 15 per cent. This will make India’s tariff lower than that of the European Union, which had entered a trade deal with the US earlier, and higher than countries which have the basic tariff rate of 10 per cent. Meanwhile, both countries have ironed out most of the differences in terms of products to be imported duty-free or with lower duties. India will allow import of soyabean and corn. “India plans to use the corn imported from the US for the production of ethanol. India has agreed to buy soyabean, which is classified as non-genetically modified, directly from the industry. However, the US is not pushing much on large purchases of soyabean as China is currently buying it from the US,” he said. India also will be importing dairy products from the US, after imposing some safeguards. “Based on certain conditions, it may allow a few dairy products, but not liquid milk,” he added. Import of agricultural products and dairy products were major red lines in the trade deal as the Indian government has been assuring farmers of safeguarding their interests.