<p>Beneath the optimism around the interim trade agreement between India and the United States, there is an asymmetry in provisions that is hard to ignore. While the agreement has brought relief to the markets and has ended a period of protracted negotiations, the government’s claims of a win-win deal have also triggered a few uncomfortable questions. </p><p>Critically, while the joint statement says India has agreed to “eliminate or reduce tariffs on all US industrial goods and a wide range of US food and agricultural products”, the US will levy an 18% tariff on imports from India. Furthermore, it could be argued that the agreement has not cleared the uncertainty, considering what it essentially signals is a pause, and not a trade deal in a legal or commercial sense.</p>.<p>Union Commerce Minister Piyush Goyal has tried to alleviate concerns of farmers by claiming that meat, poultry, dairy, GM food products, rice, wheat, pulses, and sugar have been kept out of the framework. But there are some apprehensions over the possible import of apples, soybean oil, dried distillers’ grains, etc. Farmer organisations have protested against the agreement as they fear that it would endanger an already precarious farming economy. </p><p>There are other concerns. India now enjoys a trade surplus of over $40 billion with the US. This could be strained with the commitment to purchase US goods and products worth $500 billion over the next five years. A ‘promise’ from the Indian side to stop buying Russian oil is considered to be part of the agreement, though there is no mention of this in the released text. It has been reported that India’s oil purchases would be monitored to ensure that the condition is met. The arrangement has not been officially confirmed by the Indian side, but if agreed upon, this undermines India’s strategic autonomy.</p>.<p>It is being claimed that the concessions are confidence-building measures, and the framework would lead to a more comprehensive trade agreement with better terms and conditions if trust and stability are established. </p><p>But President Trump and his administration are known for arbitrary and self-serving decisions and cannot be expected to offer a better deal later. It may be noted that many concessions promised by the US side are not legally laid down but are in the form of executive decisions, which can be revoked. The lack of transparency in many parts of the agreement is striking. But the government has, so far, not managed to address it in a language of conviction and clarity.</p>
<p>Beneath the optimism around the interim trade agreement between India and the United States, there is an asymmetry in provisions that is hard to ignore. While the agreement has brought relief to the markets and has ended a period of protracted negotiations, the government’s claims of a win-win deal have also triggered a few uncomfortable questions. </p><p>Critically, while the joint statement says India has agreed to “eliminate or reduce tariffs on all US industrial goods and a wide range of US food and agricultural products”, the US will levy an 18% tariff on imports from India. Furthermore, it could be argued that the agreement has not cleared the uncertainty, considering what it essentially signals is a pause, and not a trade deal in a legal or commercial sense.</p>.<p>Union Commerce Minister Piyush Goyal has tried to alleviate concerns of farmers by claiming that meat, poultry, dairy, GM food products, rice, wheat, pulses, and sugar have been kept out of the framework. But there are some apprehensions over the possible import of apples, soybean oil, dried distillers’ grains, etc. Farmer organisations have protested against the agreement as they fear that it would endanger an already precarious farming economy. </p><p>There are other concerns. India now enjoys a trade surplus of over $40 billion with the US. This could be strained with the commitment to purchase US goods and products worth $500 billion over the next five years. A ‘promise’ from the Indian side to stop buying Russian oil is considered to be part of the agreement, though there is no mention of this in the released text. It has been reported that India’s oil purchases would be monitored to ensure that the condition is met. The arrangement has not been officially confirmed by the Indian side, but if agreed upon, this undermines India’s strategic autonomy.</p>.<p>It is being claimed that the concessions are confidence-building measures, and the framework would lead to a more comprehensive trade agreement with better terms and conditions if trust and stability are established. </p><p>But President Trump and his administration are known for arbitrary and self-serving decisions and cannot be expected to offer a better deal later. It may be noted that many concessions promised by the US side are not legally laid down but are in the form of executive decisions, which can be revoked. The lack of transparency in many parts of the agreement is striking. But the government has, so far, not managed to address it in a language of conviction and clarity.</p>
