Section 232 concession

The Section 232 concession is significant as it is not subject to the ongoing US Supreme Court case that could rule against US President Donald Trump’s authority under the International Emergency Economic Powers Act (IEEPA) to impose reciprocal tariffs. The Trump administration had gone beyond reciprocal tariffs to impose Section 232 tariffs on sensitive sectors.

“India will eliminate or reduce tariffs on all U.S. industrial goods and a wide range of U.S. food and agricultural products, including dried distillers’ grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products. Recognising the importance of working together to resolve long-standing concerns, India also agrees to address long-standing non-tariff barriers to the trade in U.S. food and agricultural products,” the statement said.

“India will receive a preferential tariff rate quota for automotive parts subject to the tariff imposed to eliminate threats to national security found in Proclamation 9888 of May 17, 2019 (Adjusting Imports of Automobiles and Automobile Parts Into the United States), as amended. Contingent on the findings of the U.S. Section 232 investigation of pharmaceuticals and pharmaceutical ingredients, India will receive negotiated outcomes with respect to generic pharmaceuticals and ingredients,” the statement read.

The joint statement also said that India “ intends” to purchase $500 billion of U.S. energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal over the next 5 years. However, the statement said:“In the event of any changes to the agreed upon tariffs of either country, the United States and India agree that the other country may modify its commitments”.

GPUs and data centres

As India announced a tax holiday for data centres, the joint statement said India and the United States will “significantly increase trade in technology products”, including Graphics Processing Units (GPUs) and other goods used in data centres, and expand joint technology cooperation.

“The United States and India will address non-tariff barriers that affect bilateral trade. India agrees to address long-standing barriers to the trade in U.S. medical devices; eliminate restrictive import licensing procedures that delay market access for, or impose quantitative restrictions on, U.S. Information and Communication Technology (ICT) goods; and determine, with a view towards a positive outcome, within six months of entry into force of the Agreement whether U.S.-developed or international standards, including testing requirements, are acceptable for the purposes of U.S. exports entering the Indian market in identified sectors,” the statement said.