Commerce Minister Piyush Goyal on Thursday said that India will receive concessional duty access for garments made using American yarn and cotton under its trade agreement with the United States, similar to the benefits currently enjoyed by Bangladesh.
The US will reduce reciprocal tariffs on Bangladeshi goods to 19 per cent. However, garments from Bangladesh attract zero duty only if they are manufactured using US cotton and man-made fibres. At present, a Bangladeshi garment now faces a 31 per cent levy (12 per cent for most favoured nation plus 19 per cent reciprocal), and if it uses US fibres, then duty falls to 12 per cent.
India will get the same benefits as Bangladesh: Piyush Goyal
"Bangladesh ko jo Mila hai, wo Bharat ko bhi milne wala hai final agreement me (Whatever Bangladesh has got, India will also get the same in the final agreement," Goyal told reporters.
"Just as Bangladesh has a facility that if raw material is purchased from America, then if you process it and make cloth and export it, then it will be available at zero reciprocal tariff. India also has the same facility and India will also get it. Right now, our framework agreement is being made. When the interim agreement is finalised, then you will get to see this in the fine print," he said.
He further explained that if Indian companies source yarn and cotton from the US, manufacture garments in India, and export them to the American market, those products will enjoy the same duty concessions as Bangladeshi garments. "This provision exists in the US-Bangladesh agreement, and it will be part of our agreement as well," he said, adding that it will not adversely impact Indian cotton farmers.
The Minister noted that the US has limited cotton production, with exports of only about USD 5 million, while India’s target is USD 50 billion.
India and the US have already finalised the framework for the first phase of their bilateral trade agreement, which is expected to be implemented in March.
What did Piyush Goyal say on the India-US trade deal?
Hitting out at the Leader of the Opposition, Rahul Gandhi, Goyal said, "Rahul Gandhi is a bundle of lies. He spreads complete misinformation."
He further clarified that India's interests and the interests of Indian farmers have been fully protected in the US-India trade deal. "Most of the products of Indian farmers, our dairy, poultry, rice, wheat, soybean, and maize, banana, strawberry, cherry, orange, vegetables, ethanol, tobacco, meat, pulses, millets, bajra, ragi- almost 90-95% of the produce of farmers is outside the US trade deal and which is the need of India, which we import even today, which will not cause any harm to the farmers in our country," he said.
The minister's remarks assume significance in the wake of Rahul Gandhi’s claim on Wednesday that the India-US interim trade deal amounted to a "wholesale surrender," alleging that it compromised India’s energy security and farmers' interests.
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