In a major breakthrough, Prime Minister Narendra Modi and US President Donald Trump, after a phone call on Monday night, announced a historic India-US trade deal. Trump has agreed to lower the current 50 per cent reciprocal tariff on Indian exports to 18 pc, while tariff on American exports to India will be reduced to zero.
On social media, Modi thanked Donald Trump by noting, “Delighted that Made in India products will now have a reduced tariff of 18%. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement. When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation.”
Modi also wrote: “President Trump’s leadership is vital for global peace, stability and prosperity. India fully supports his efforts for peace. I look forward to working closely with him to take our partnership to unprecedented heights.”
There was jubilation among Indian exporters particularly in the textile, jewellery, leather and marine product sectors, after Trump announced the lowering of tariff on Indian exports.
On Tuesday morning, Prime Minister Modi was welcomed with garlands by jubilant NDA members of Parliament.
At the NDA parliamentary party meeting, Modi said, “India coming to the world’s centrestage is the biggest happening of this century…When US slapped a steep 50 pc tariff on Indian exports, the opposition tried to put us in the dock and started asking questions.”.
Modi said, the new India-US deal indicates that India’s role in world power balance has now become important. “Duniya Mein Bharat Ki Pooch Badhi Hai”( India is being sought after by the world), he added.
At the same time, Modi advised NDA MPs to go and meet manufacturers and exporters to explore more avenues of exports and focus on quality of Made in India products. “Hamein Patthar Par Lakeer Kheenchne Ki Aadat Chhodni Chahiye” (We must stop working on old tried-out ideas), he said.
It is a fact that the new India-US trade deal has given a competitive edge to our exporters compared with those from Indonesia and Pakistan (19 pc), and Bangladesh and Vietnam (20 pc). Chinese exports to US attract a steep tariff of 34 pc.
And now a look at how the new India-US deal it will help Indian exporters.
India exports $ 8.8 billion worth drug formulations, $ 7.4 billion telecom instruments, $5.7 billion precious stones, $4.4 billion petroleum products, $3.5 billion gold and jewellery, $3.1 billion RMCG cotton, $2.9 billion iron and steel, $2.7 billion cotton fabrics, $2.7 billion electricals and $2.6 billion marine products to the United States.
Exporters, who were facing problems for the last three months due to steep tariff hike, will now get a boost.
Overall, India’s exports to the US stands at $80.8 billion and imports from the US stands at $44.4 billion. India presently holds a $36.4 billion trade surplus vis-a-vis the US.
Both US-India Chamber of Commerce and all Indian chambers of commerce have welcomed the new deal. India has agreed to buy defence products, agricutural goods and petroleum from the US, but the details will be known only after the formal trade deal is signed.
Credit for reaching this landmark trade deal goes to Narendra Modi, who, in the face of difficulties and challenges, did not lose his cool and played the game of patience till the last.
After getting the “mother of all deals” Free Trade Agreement signed with the European Union on January 27, Modi played his cards well and ultimately made the US President see reason.
It was Trump who rang up Modi, spoke to him and decided to lower the tariff on Indian exports to 18 per cent, thus ending three months of tension and uncertainities that had gripped the Indian industry.
The India-EU FTA deal and the new India-US trade deal, along with the big bonanza announced in the Union Budget for manufacturing and infrastructure sectors, thus paves the path for India to become the third largest economy of the world soon.