Indo-US Trade Deal: Following a Middle Path?

‘Give and take policy’ forms the very basis of every agreement or deal. Adamant postures adopted by either side will definitely put a spanner in such efforts. So in any agreement, both sides can be benefitted only when they are ready to offer something to the other side. Also, there can’t be a complete win-win situation for any sides involved in any deals. One has to keep this simple basic thing in mind while studying the proposed Indo-US trade deal amid much noise from different quarters, including the parliament, even before the formal signing of the agreement. While the opposition parties are alleging that the deal is a total surrender before the US, the government is maintaining that it is the best deal under the given circumstances.

Amidst such claims and counter-claims, it will be proper to find out the truth by closely examining the information made available by both the governments about the deal. At the outset, it must be admitted that the US has never denied pressurising India to stop buying crude oil from Russia as a punitive measure for attacking Ukraine without paying any heed to the advice given by the US and its European associates. On its part, India didn’t succumb before the US pressure and continued to import oil from Russia on the pretext of strategic autonomy. To resolve the issue, the US has now offered a middle path and asked India to purchase crude from Venezuela to prevent its energy import bill from going up. It may be mentioned here that India has accepted the offer partially by allowing the private parties to buy oil from Russia.

It is learnt that India has made a commitment to buy $ 500 billion worth of goods from the US in the next five years, which presently stands merely at $ 50 billion a year. The opposition has launched vociferous protests against this commitment, while the government sees nothing wrong in it. Citing the present trade figures, which show that India has a trade surplus of $ 38 billion, the government has opined that the country’s export to the US will further go up after slashing the tariff from 50 per cent to 18 per cent. It also argued that the commitment and subsequent slashing of tariffs have virtually opened the doors for higher exports to the largest economy of the world.

Similarly, the government has denied the allegation that it has compromised the interests of the Indian farmers, maintaining that New Delhi has agreed to open doors mainly for those crops which are not heavily grown in the country. It also hinted that the government would fix import quotas to safeguard the farmer’s interest. It may be mentioned here that at present, India has a trade surplus of $ 3. 6 billion on agro-products. Citing figures that GM crops are being grown over 200 million hectares in 76 countries, the government is trying to allay fears regarding the use of genetically modified seeds. However, we will have to restrain ourselves from jumping to any conclusions till the final deal is inked.