Won't be difficult to buy US goods worth $500B: Goyal
What's the story
India's Commerce Minister Piyush Goyal has said that the country will have no trouble buying goods worth $500 billion from the United States over the next five years. He called this figure "very conservative" considering India's fast-growing economy and its increasing import demand. Speaking to PTI, Goyal said India's overall import demand is likely to reach about $2 trillion in the next five years.
Trade opportunities
Rising import demand to benefit US exporters
Goyal emphasized that the rising import demand will create major opportunities for US exporters, as long as they remain competitive. He said India is already importing $300 billion worth of goods that could be sourced from the US. The minister also highlighted aviation as a major contributor to this trade agreement, with India having already placed significant orders with Boeing alone.
Sectoral demands
Aviation and coking coal to be major contributors
Goyal said India will need a steady supply of spare parts in addition to aircraft and engines. He said the country has already placed orders worth $80-90 billion for the next five years, which could go up to over $100 billion just for the aviation sector. The minister also highlighted India's growing need for coking coal to fuel steel production, estimating a requirement of $30 billion per year.
Purchase details
Joint statement on trade deal
The joint statement from India and the US revealed that India plans to buy $500 billion worth of goods from the US over the next five years. This includes energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal. The two nations have also announced a framework for an interim trade agreement under which tariffs on New Delhi will be reduced to 18%.
Tariff reductions
US to cut import duty on Indian goods
As part of the trade agreement, the US will cut the import duty on Indian goods to 18%. This comes after a 25% reciprocal tariff and an additional 25% levy were imposed by the US on India. The reduction in tariffs is expected to boost exports from India's labor-intensive sectors like textiles and apparel, leather and footwear, plastic, and rubber products.