United States may ask India for substantial market access in agriculture, ethanol: Report
The US seeks expanded market access from India in agriculture, dairy, ethanol, and medical devices as part of a bilateral trade agreement (BTA) to be finalized in eight months. The US demands concessions in these sectors and tariff cuts, while advocating for reduced duties on labor-intensive products. Trade barriers, including tariffs and import restrictions, have led to a trade imbalance between the countries.
The United States (US) is expected to request more market access from India in sectors such as agriculture and dairy products, ethanol, and medical devices as part of the proposed bilateral trade agreement (BTA) that both countries aim to finalize within the next eight months, reported Business Standard.
“The US will ask for major concessions in dairy and agri products, ethanol, and removal of price control on medical devices. They will not be satisfied with the limited tariff cuts in motoreycles and bourbon whiskey. We should ask the US to bring down duty on labour-intensive products such as textiles, leather and gems and jewellery from 5-7 per cent to zero,” a former senior commerce ministry official, who was involved in negotiations with the Donald Trump administration during its first term, was quoted as saying by Business Standard.
In 2024 National Trade Estimate Report on Foreign Trade Barriers, the US Trade Representative (USTR) highlighted that despite ambitious targets for blending ethanol with gasoline, India prohibits the importation of ethanol for fuel use. In addition, the DGFT restricts biofuel imports (HS 2207.20, HS 2710.20, and HS 3826) for nonfuel use to actual users. Since May 2019, the MOCI requires an import license for importing biofuels (HS 196 | FOREIGN TRADE BARRIERS 2207.20, HS 2710.20, and HS 3826). The MOCI also requires that Indian importers obtain an import license from DGFT to import ethanol for non-fuel purposes.
In a factsheet released on Friday, the White House stated that the US is one of the most open economies in the world, yet our trading partners keep their markets closed to our exports. This lack of reciprocity is unfair and contributes to our large and persistent annual trade deficit. It pointed that the U.S. average applied Most Favored Nation (MFN) tariff on agricultural goods is 5%. But India’s average applied MFN tariff is 39%. India also charges a 100% tariff on U.S. motorcycles, while we only charge a 2.4% tariff on Indian motorcycles.
The factsheet also mentions that there are endless examples where our trading partners do not give the United States reciprocal treatment. The U.S. tariff on ethanol is a mere 2.5%. Yet Brazil charges the U.S. ethanol exports a tariff of 18%. As a result, in 2024, the U.S. imported over $200 million in ethanol from Brazil while the U.S. exported only $52 million in ethanol to Brazil.
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Source : Chinimandi
