American wines, motorcycles, medical devices gain from India-US interim trade pact

Union Commerce and Industry Minister Piyush Goyal speaks during a press conference on the recently announced India-US trade deal, at Vanijya Bhawan, in New Delhi (PTI photo)

• India to cut or eliminate import duties on US goods under interim trade deal
• Tariff cuts for Harley-Davidson bikes, wines, fruits, nuts, and medicines.
• Electric vehicles, GM crops, and key staples excluded from the agreement

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From wines to Harley Davidson motorcycles, India has agreed to eliminate or reduce import duties on a wide range of American goods under an interim trade agreement with the United States, according government sources and a joint statement.

The framework for the interim deal was finalised on February 7. The formal deal is expected to be signed around March, with agreed concessions taking effect thereafter.

Under the framework, India will eliminate or cut tariffs on all US industrial goods and a broad basket of American agricultural products, including dried distillers’ grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruits, soybean oil, wine and spirits and additional items.

Wines and spirits

India will reduce duties on American wines and spirits through minimum import price (MIP) provisions to balance the opening of tariff lines with protection of the domestic industry.

The MIP establishes a price floor below which imported alcoholic beverages cannot be sold, acting as a guardrail against under‑invoicing or dumping while still allowing duty reductions to benefit legitimate imports.

Fruits and nuts

Tariff concessions have been granted on select American fruits and nuts, including pista, walnuts, almonds, and apples. Some of these concessions will take effect from day one, while others will be phased in over time.

To protect domestic producers, quota‑based access has been set for sensitive products like apples, where import duty will be capped at 25 percent within the quota and the minimum import price has been raised to Rs 80 per kilogram from Rs 50 per kilogram previously.

Pista, walnuts, almonds, certain lentils have also given tariff concessions have been given either in a phased manner or from day one.

For lentils, India has provided tariff-rate quotas (TRQs), allowing imports at reduced duties up to a specified quantity,

Bikes and cars

Government sources informed that under the framework, Harley-Davidson motorcycles in the 800–1,600 cc range will enter India duty-free from day one, while tariffs on other high-end American vehicles will be reduced.

Duties on internal combustion engine cars above 3,000 cc will drop to 30 percent, while electric vehicles remain outside the deal’s scope.

Pharmaceuticals and medical devices

Tariff reductions under the interim trade deal cover a wide range of medicines, including those for cancer, neurological, pediatric, and cardiac treatments.

Selected medical devices will also receive duty reductions, including laproscopes, X-ray parts, pacemakers, diagnostic instruments, and imaging apparatus.

For some devices, the concessions will be phased in over time, allowing India to gradually align regulatory and pricing frameworks while opening the market to US suppliers.

Cotton and DDGs

India has provided duty concessions on American extra-long staple cotton through tariff-rate quotas (TRQs).

“Extra-long staple cotton is not produced in large quantities in India; we have been importing it in significant volumes since the Congress era,” Commerce Minister Piyush Goyal noted.

The concessions are aimed at facilitating US exports while ensuring that Indian textile manufacturers have access to this critical raw material.

Under the interim trade deal, India has offered limited tariff concessions on dried distillers’ grains with solubles (DDGs) from the US, which will help meet animal husbandry needs, with only the quantities required allowed into the domestic market.

The move is expected to particularly benefit India’s poultry sector, Goyal said.

DDGs are a byproduct of ethanol production from grains such as corn.

The US will also get tariff concessions on chemicals (both organic and inorganic), certain cosmetic products, and computer-related goods from India as well.

Exclusions

The interim trade deal does not provide tariff concessions on American electric vehicles, genetically modified (GM) crops, and a wide range of sensitive agricultural, dairy and related products, including staples such as maize, rice, wheat, millets, ragi and soyabean; and dairy items like milk, cheese, butter and yoghurt.

Concessions also exclude poultry, meat and ethanol (fuel); tobacco; and many fruits, vegetables and spices, such as bananas, citrus fruits, potatoes, peas, beans, mushrooms and dried chillies, all of which remain protected under India’s existing import regime.