India is to slash tariffs on high-end US vehicles to 30 percent from as high as 110 percent and eliminate duties on Harley-Davidson Inc bikes under an interim trade pact, an official said, but New Delhi would not make concessions for electric vehicles, a move that pointedly leaves Tesla Inc out.
The US and India moved closer to a trade pact after releasing an interim framework on Friday, days after US President Donald Trump said that duties on Indian exports would be cut to 18 percent from 50 percent in exchange for New Delhi halting purchases of Russian oil.
Under the deal, tariffs on traditional internal-combustion cars with engine capacity of more than 3,000cc would fall gradually to 30 percent over 10 years, an Indian government official said.
Photo: EPA-EFE
Electric vehicles have been excluded from the deal, the official added, shutting the door on a possible lower-tariff entry route for Tesla — ignoring a key demand from Elon Musk, who has frequently criticized India’s high duties.
The stance contrasts with the broader auto access India has offered to the EU, where New Delhi agreed to steeper tariff cuts to as low as 10 percent, across a wider range of vehicles, including eventual concessions on some electric vehicles.
India, the world’s third-largest car market after the US and China, has long protected its domestic auto industry with steep import tariffs of 70 to 110 percent.
It currently imports few vehicles from the US, although it does bring in high-end motorcycles such as Harley-Davidsons, and other premium motorbikes would also receive reduced duties, the official said.
The tariff cuts are likely to be implemented after the two sides sign an agreement next month.
Meanwhile, India has proposed opening up parts of its agriculture industry to cheaper imports from the US, a move that might lower food and feed costs, but intensify pressure on some domestic farmers.
The world’s most populous nation agreed to cut or eliminate import duties on US food and agricultural products, including distillers dried grains, red sorghum for animal feed, soybean oil, tree nuts, and fresh and processed fruit, according to a joint statement on the framework for an interim trade deal.
India also agreed to address long-standing nontariff barriers to the trade in US food and agricultural products.
That marks the broadest lowering of trade barriers in the politically sensitive agriculture sector — accounting for about one-fifth of India’s GDP — for US producers under a push to deepen trade ties.
“Agricultural output from India will now be able to go to the US on zero duties,” Indian Minister of Commerce and Industry Piyush Goyal told a news conference on Saturday.
“We have not given any concessions or done anything that will hurt the farmers,” he said, referring to the joint statement.
Goyal, who clarified that India has not provided any concessions on import of genetically modified crops from the US, said that agriculture products such as dairy, poultry and soybean among others have been kept out of the negotiations for the interim deal.
Additional reporting by Bloomberg
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