Bhubaneswar: India and US are on the verge of a trade deal. Reportedly, it could be signed in the next 48 hours. It is significant because the US is the India’s largest import market. So New Delhi was keen to avoid Donald Trump’s tariffs. After a long talk for months, there could be a deal though it is not a full trade deal as yet. But it would be an interim agreement.
Lat week an Indian team travelled to Washington. They extended their stay to sort out the major issues. As it is known the US wants access to India’s agriculture market. But India is reluctant to open it up, which was the reason the deal looked unlikely. Especially before the deadline of 9 July, when the Trump’s tariffs are expected to kick in. It is hoped from both sides to cracks a deal before 9 July.
In one point the Indian officials said that they are not in a hurry. They say were keen but not desperate to crack a deal with US. The current scenario states, the sticking points are removed from the agriculture and dairy. Agriculture and dairy have been kept out of this deal. The focus is on other tariffs such as American whiskey, automobiles, etc.
This mini deal is not going to be enough for the highly ambitious trade goal set by both India and US. They want to reach 500 billion dollars by 2030 which requires a full trade deal. It brings us to the areas of contention. Donald Trump wants to sell American farm goods like soya bean and corn in India. Whereas agriculture is a sensitive sector in India. There are about 45% of workforce work in agriculture in our country. So successive governments have sealed this sector from competition.
Moreover, politically, farmers are a major chunk of voters in India. If the tariffs are cut from imports and imported items are made cheaper Indian farmers will punish the government. Similar concerns arise in dairy sectors as well. Around 70 million farmers in India are involved in milk production. So competition from outside is not welcome. But Donald Trump refuses to buzz. He wants to enter India’s agro-dairy market.
On the other hand, India demands more access to labour intensive sectors. Basically the ones which will create a lot of jobs in our country like garments, foot wears, electronics and so on. These are the points that are holding up a full deal. There is another new political concern. A US senator is pushing the bill which is linked to Russia. It calls for a 500% tariff on India. The argument here is whoever buys anything from Russia whether it is oil, gas or Uranium, that country will face 500% tariffs. Around 80 American senators have backed this bill. So this bill can be passed even without the support of the president Donald Trump. It is huge concern for India now.
Russia is our top oil supplier and America is our top export market. So 500% tariff would be a deadly blow for India. Foreign minister S. Jaishankar was asked about this threat when he was in Washington for QUAD Summit. If this bill is passed there would be the need of a new deal where India would be exempted from the new tariffs.
-OdishaAge
