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September 16, 2000
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India, US sign trade agreement on textiles

The United States and India announced a trade agreement calling for New Delhi to reduce barriers to American textile imports, officials said.

The agreement, hammered out on the sidelines of Indian Prime Minister Atal Bihari Vajpayee's visit to Washington, will require New Delhi to cap tariffs on a wide range of textile and apparel products, from yarn to sportswear.

"This agreement paves the way for US producers of textile and apparel products to expand shipments to India, one of the world's largest markets," US trade representative Charlene Barshefsky said in a statement.

Washington has long complained that India remains one of the most heavily protected markets in the world despite promised reforms.

India is the United States' 29th largest export market. By contrast, the United States is India's biggest trading partner and foreign investor.

During his Washington visit, Vajpayee has stressed the importance of economic ties between Washington and New Delhi, and US officials said trade relations were gradually improving.

The textiles agreement establishes legally binding tariff ceilings or caps on key textile and apparel items, ensuring US producers can access the Indian market, one of the world's fastest growing.

Under the agreement, Indian tariffs, duties and taxes cannot be raised beyond the agreed ceilings.

It was the second major trade agreement this year between the United States and India. In January, India agreed to eliminate trade barriers to US farm goods and a wide range of other products.

But other trade disputes remain.

Both nations have yet to work out their differences on a new round of global trade talks. At last year's World Trade Organisation meeting in Seattle, Washington and New Delhi clashed over a US-backed initiative to boost labour standards.

The United States has also accused India of imposing a "de facto embargo" on US shipments of soda ash, which is used to make glass.

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