As India and the US officials are busy finetuning the details of the bilateral trade deal announced by Prime Minister Narendra Modi and President Donald Trump, all eyes are on the joint communique that is going to be issued.
On Wednesday, Commerce Minister Piyush Goyal told Parliament that India has “successfully safeguarded its sensitive sectors” like agricultural products and dairy after nearly a year-long negotiations. He added, “energy security for Indians is the top priority of the government”.
Goyal said, the deal will open up opportunities for skilled Indian professionals and MSMEs in the US market. He pointed out that the 18 pc US tariff on Indian products is lower compared to the tariff being levied on other countries.
Michael Kugelman, US expert on South Asian policy matters, says, the deal marks the “biggest victory” in bilateral India-US relations in nearly a year. “It is a significant confidence-building measure after months of strained ties”, he added.
Kugelman said, while India has reduced its imports of Russian oil in recent months, it is difficult to imagine a complete halt to such purchases after this deal.
After the Trump administration imposed 50 pc tariff on Indian goods, the manufacturing sector, particularly IT, leather and textile industries had to face problems. After the new deal was announced, there has been a steep rise in Sensex and Nifty indices and the Indian Rupee has become stronger vis-a-vis the US dollar. On Wednesday, the dollar rate was at Rs 90.28, a 1.3 percent jump.
Richard M. Rossow of Center for Strategic and International Studies lauded the calmness with which India tackled the tariff crisis and kept its stance on not allowing any compromise on agriculture.
Rossow said, “First, the US wanted India to commit to buying a certain percentage of American goods to help repair the trade deficit. Second issue was agricultural market access. For India, certain staple grains are a no-go. For the US, the question was whether this was a negotiating tactic or a real red line.”
Rossow also said, “At the end of the day, India approached the US pressure with a calm head. The last time President Trump was in office, there was a medium-intensity trade war. ….This time, India didn’t fight back. They put their head down, kept negotiating, and tried to comply. So, first and foremost, credit goes to India for choosing not to escalate the situation.”
Those who were saying that the US, under Trump administration, has become India’s enemy, that Trump no more liked Narendra Modi, have got their answers. No country lowers tariff from 50 per cent to 18 per cent on its enemy.
Secondly, the world noticed, Modi neither feared, nor surrendered. It was Trump who phoned Modi for the deal, not vice versa.
India stuck to its stand that there would be no compromise on giving access to agriculture product sector, and no such deal happened.
As far as oil is concerned, India has the right to purchase oil at the best possible price from whichever source it prefers. India will raise import of oil from the US, but gradually.
Overall, this deal will prove to be helpful in making India the third largest economy of the world. India will keep its head high in the comity of nations.
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