NEW DELHI, Feb 12: India will get concessional duty access for garments made using American yarn and cotton under its trade agreement with the US, similar to the benefits currently provided to Bangladesh, Commerce and Industry Minister Piyush Goyal said on Thursday.
The United States will reduce reciprocal tariffs on Bangladeshi goods to 19 per cent, but garments attract zero duty only if made with US cotton and man-made fibres. 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.
“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 here.
If an Indian company procures yarn forward and cotton forward from the US, manufactures garments, and re-exports to the US, those garments will also receive duty-free access in America, just like Bangladeshi firms, he pointed out.
That is there in that US-Bangladesh agreement, and “it will be in our agreement also”, he said, adding that it will not have any impact on Indian cotton farmers.
The US has limited cotton production, its exports are only USD 5 million, and for India, the target is USD 50 billion, the minister said.
India and the US have finalised a framework for the first phase of the bilateral trade agreement. It is likely to be implemented in March.
These remarks are important, as Leader of Opposition Rahul Gandhi, on Wednesday, alleged that the India-US interim trade deal was a “wholesale surrender”, with India’s energy security handed over to America and farmers’ interests compromised.
Meanwhile, addressing a Medtech, innovation and startup event here, Goyal said the free trade agreements finalised by India will provide huge market access at concessional duties to the domestic medical devices industry.
In some free trade agreements (FTAs), certain Indian medical devices would also get duty concessions, he added.
“We are opening developed markets through the nine FTAs, which cover 38 countries with rich people and high per capita incomes,” the minister said.
He suggested looking for a site to set up in states like Rajasthan and Uttar Pradesh to establish a medtech zone just like AMTZ in Andhra Pradesh.
Goyal added that the National Industrial Corridor Development Corporation (NICDC) can look at reserving 50 -100 acres for medical device units in the country. (PTI)
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