NEW DELHI: Until a couple of months ago, a trade deal with the US did not seem to be on the horizon. India refused to back Donald Trump’s claim of having brokered the pause of Operation Sindoor and the Trump administration persisted with its crude fulminations against India’s tariffs. US commerce secretary Howard Lutnick seemed to be bang on when he, in a podcast, described the prospect of an early deal by saying that “the train had left the station”.Given the backdrop, the framework for an interim agreement between the two countries as precursor to a Bilateral Trade Agreement appears to be a dramatic breakthrough with positive spin-offs for the entire gamut of bilateral ties. India stands on a better footing vis-a-vis not just its competitors like Indonesia, Bangladesh and Vietnam, but also in comparison with Pakistan, which has quickly cast itself as an ally of the US. While the lowering of tariff will especially help those engaged in MSME sector and labour-intensive sectors of apparels, leather and marine products, the embarrassment that Pakistan ought to be feeling over its premature celebrations comes as the sweetener.
Those who negotiated behind the scenes, without getting distracted by the bellicose remarks of the likes of Peter Navarro, senior US trade counsellor and a Trump confidant, managed to fend off pressure from the US for letting in corn, soybean, genetically modified crops. The states in the US which produce most of these commodities also happen to be home to Trump’s ardent MAGA constituency.With the US mid-term polls approaching and the US president’s newly acquired constituencies threatening to slip away, pressure on him to please the base must have been acute.The success of Indian negotiators will also help govt insulate the deal against “surrender” jibes. Opposition parties criticised the announcement, nonetheless, and on Monday, Parliament is set to see commotion over the alleged sellout. The argument is based on reduction of tariff on dried distillers’ grains (DDGs) and red sorghum for animal feed, which are not the same currency, politically or economically, as cereals. Moreover, commerce and industry minister Piyush Goyal said there was demand for allowing the import of both commodities from animal husbandry sector.As for the criticism that the door has been kept ajar for more concessions, with India agreeing to discuss the US demand for further access to American farm goods, the agreement has a similar provision for India being granted greater access for its products.Also, prima facie, India should not have any problem in keeping its side of the bargain so far as the common objective of taking the trade volume to $500 billion by 2031 is concerned because of the sheer demand of its growing economy and because the US produces some of the best products, from airlines to semiconductor manufacturing equipment.By removing the pall of uncertainty that was hanging over bilateral ties and which gave Pakistan and other inimical players a reason to rejoice, the agreement can enhance assuredness in India’s play in the diplomatic arena. At a press conference on Saturday, Goyal could not restrain himself, grinning when asked whether the formulation about the two countries agreeing to strengthen economic security alignment to enhance supply chain resilience and innovation through complementary actions to address “non-market policies of third parties” was aimed at China. “Sajhne wale samajh gaye” (the intelligent will understand), he said.
