Centre must stay steadfast and honour the India-US deal

The joint statement by India and the United States, following the establishment of a framework for an interim agreement regarding reciprocal and mutually beneficial trade, makes it clear that the interests and concerns of both countries have been taken into account. A joint statement said, “it reaffirms the countries’ commitment to the broader US-India Bilateral Trade Agreement (BTA) negotiations, launched by President Donald J Trump and Prime Minister Narendra Modi on February 13, 2025, which will include additional market access commitments and support more resilient supply chains.” The interim agreement will represent “a historic milestone in our countries’ partnership,” the statement said. While such documents are prone to such hyperbolic embellishments, it is undeniable that the description is largely correct.

Many people may not remember that our relations with the US were thorny in the earlier decades of Independence, primarily because Jawaharlal Nehru was infatuated with socialism and tilted towards the Soviet Union. However, the government and people of America were very favourably inclined towards India. During the administration of Lyndon Johnson, who weaponised the supply of wheat to India, the ties got further strained in the 1960s. The nadir came a few years later when the Nixon-Kissinger duo brazenly supported Pakistan (thus condoning the genocide in what became Bangladesh) and opposed India, tooth and nail. There was even a distinct possibility of the soldiers of two countries fighting each other. Since then, there has been a secular rise in the bilateral ties of what were once called “estranged democracies,” despite short-term irritations like the sanctions by Washington against Delhi after Pokhran II and the tensions last year following Trump’s tariffs and statements. Against this backdrop, the commitments made by both countries are reasonable. India has agreed to eliminate or reduce tariffs on all US industrial goods and a wide range of US food and agricultural products, including dried distillers’ grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products.

On its part, the US will apply a reciprocal tariff rate of 18 per cent on originating goods of India, including textiles and apparel, leather and footwear, plastic and rubber, organic chemicals, home décor, artisanal products and certain machinery, among others. Subject to the successful conclusion of the interim agreement, it will remove the reciprocal tariff on generic pharmaceuticals, gems and diamonds, and aircraft parts. Both countries have also committed to providing each other with preferential market access in sectors of respective interest on a sustained basis. They will establish rules of origin. They also agreed to address non-tariff barriers that affect bilateral trade. Unsurprisingly, the Congress-led Opposition has called the agreement as rushed, opaque, and tilted dangerously against India’s farmers and strategic autonomy. Further, farmer unions say the Agreement will expose Indian agriculture to aggressive foreign competition. These reactions are on expected lines, for neither has the grand old party been able to shed its irrational antipathy towards the US nor did leaders of farmer organisations show any willingness to accept anything that tends to undermine their interests. In fact, the interests of farmers and their leaders are usually divergent: the former can gain only if the sector is liberalised and globalised, while the latter are opposed to such developments. Therefore, the government must disregard their criticism and move ahead with the deal.