Indian goods to gain edge over China, others in US market: Piyush Goyal
Tariff cut on Indian brands
Says adequate safeguards for India in trade agreement with US
New Delhi: Commerce and Industry Minister Piyush Goyal on Sunday said Indian goods will have a competitive advantage in US markets compared to products from China and other competitor countries, which face higher levies, following the reduction in reciprocal tariffs to 18 per cent.
India and the US have finalised a framework for the first phase of the bilateral trade agreement, which is expected to be signed by mid-March.
Goyal said reciprocal tariffs (RTs) on India are now among the lowest compared to its competitor nations.
These countries include China (35 per cent), Thailand (19 per cent), Myanmar (40 per cent), Cambodia (19 per cent), Bangladesh (20 per cent), Indonesia (19 per cent), Brazil (50 per cent), and Vietnam (20 per cent).
With lower tariffs, India’s labour-intensive sectors, such as textiles, leather and footwear, handicrafts, chemicals, and gems and jewellery, will be more competitively priced in the US market compared to these nations.
“So, we have to see our competitive advantage over others. And comparatively, India’s RTs amongst our peer countries, emerging market economies, and developing countries are amongst the lowest.
“So, therefore, we have an advantage over China’s 35 per cent, and we are 18 per cent,” he told PTI Videos in an interview.
He added that the comparative advantage always gives a country an edge in global markets.
“The important thing is competitive advantage. Even when we reduce our tariffs (for US goods), it’s about competitive advantage,” he said.
Goyal also dismissed criticism that New Delhi conceded too much by accepting the 18 per cent tariff while offering duty concessions to American goods.
He was replying to a question whether India reducing its customs duties, while the US is only cutting its reciprocal tariffs, puts India at a disadvantage.
“I don’t think this is a material issue at all. When some people talk about it or try to highlight this, it only reflects that they don’t understand international trade and they’re only trying to mislead the people,” he said.
He added that businesses, exporters and industry associations understand these issues and have welcomed the agreement.
“…because they realise the massive trade advantage that this is going to give India. And it will ultimately help our farmers. We are today one of the largest exporters of farm products…we are exporting 55 billion dollars of farm and fish products every year. 5 lakh crores. All of that is income for our farmers…It’ll certainly give them a much bigger value for the farm produce, and farmers’ incomes will increase,” Goyal said.
He said adequate safeguards are in place in the trade agreement with the US to protect the interests of farmers and the domestic industry from any significant increase in imports.
The trade deal with the US will “ultimately help our farmers”, who are already exporting USD 50-55 billion worth of agricultural and fish products, he said.
The minister added that Indian goods will have a competitive advantage in the American market due to the 18 per cent tariff, as competitor nations such as China face tariffs as high as 35 per cent, while other countries are subject to levies of over 19 per cent.
“This is a two-page document (the India-US joint statement),” he told PTI Videos in an interview.
Citing the example of the free trade agreement with the European Union, Goyal said he went to the Cabinet with a large set of documents related to the India-EU trade deal.
“So, it’s a lot of things, which are yet to be brought in. And it cuts both ways. I’m sure the United States would equally want to safeguard, if we flood their market… It’s something which is a normal outcome of any negotiation.
“So, it’s work in progress…Safeguards are always there. So, it’s something which, if anybody is trying to highlight that it’s not in this two-page joint statement, is trying to mislead the people, and there’s still a lot of clarity required,” he said.
He added that both India and the US have sensitivities about a certain set of products, and both have safeguards for those.
“We’ve safeguarded all of them,” he said, adding that India has not granted any duty concessions in dairy products. GM (genetically modified) products, meat, poultry, soya meal and corn.
But, there are some pulses and lentils, which India imports, and “we have given them some access, market access,” he said.
“Ultimately, it has to be a give and take. So, if I don’t give anything, how will I open the market for my farmers in the US?” he said.
India has opened its sectors in a very calibrated manner, the minister said.
“Every one of them is very balanced, very well thought of and will support the India growth story and finally support Indian farmers, who also want to export their products, particularly processed products, to the rest of the world. So, it’s a calibrated opening,” he said.
On dry fruits, he said, India is importing about three and a half billion dollars of dry tree nuts, and of that, already a billion dollars comes from the US.
“I have no problem if it comes from the US. It helps the consumers. By the way, amongst all stakeholders, the largest stakeholder is the customer, 1.4 billion Indians,” he said, adding that “if they (consumers) get something cheaper, why not?”.
