India–US Deal Is Hailed, Scope And Commitments Still Unclear
WASHINGTON, DC – The much awaited India–US trade agreement announced by President Donald Trump and Prime Minister Narendra Modi has drawn strong endorsement from Indian American business leaders, while prompting caution from officials who say key details are still missing. Supporters have described the announcement as a breakthrough, but policy veterans argue it may be premature to judge its scope or impact.
Venture capitalist and Republican fundraiser Asha Jadeja Motwani expressed confidence that Modi would be willing to rethink India’s energy sourcing as part of the deal. She said she believed the prime minister would be open to replacing Russian oil imports with US or US allied energy supplies.
Former US Assistant Secretary of Commerce for Trade Development Raymond Vickery offered a more restrained assessment, saying the agreement’s primary significance was in halting a deterioration in bilateral ties. “The major import of the deal is to stop the downward spiral in US India relations,” he said.
Vickery welcomed the reported reduction in tariffs from 25 per cent to 18 per cent but emphasized that the specifics remain unclear. He said it is not yet known which products would be covered and questioned claims that India had eliminated tariff and non-tariff barriers, particularly in sensitive areas such as agriculture, dairy, pulses and grain.
He also cast doubt on headline figures cited by the Trump administration, calling talk of $500 billion in additional purchases “an extraordinary figure” given that annual two way trade currently totals about $200 billion.
Rick Rossow, Chair on India and Emerging Asia Economics at the Center for Strategic and International Studies, noted a slowdown in US India trade toward the end of the year and warned that Washington risked losing ground as India signed agreements with other partners. He described the announcement as potentially a first phase, saying it appeared aimed at improving market access in India and restoring US imports from India to more typical tariff levels.
Under the current framework, US tariffs on Indian goods are close to those imposed on America’s closest allies, including the United Kingdom at 10 per cent, the European, Switzerland, Japan and South Korea at 15 per cent.
Trump said Modi had committed India to buying American goods “at a much higher level,” including more than $500 billion worth of US energy such as coal, along with technology, agricultural and other products. In a social media post, Trump also said India would move to reduce tariffs and non tariff barriers on US goods to zero.
If this were to happen, it would mean a major shift in India’s long standing trade policy, which has relied on protective measures to support its home grown industries, and could significantly expand access for US agricultural products, energy supplies and manufactured goods – things that were sticking points over the past several months in carving out a deal.
India, however, has not publicly confirmed any plan to eliminate these barriers, leaving open questions about how far New Delhi is prepared to liberalize its trade regime.
Despite the high profile announcements, critical aspects of the agreement remain unresolved, including which specific US products India has committed to purchase and the timeline for any changes. (IANS)
