Finally, a framework has been established for the trade agreement between India and the United States. Following the unilateral announcement made by U.S. President Donald Trump, keeping India and the government in the shadows, questions such as what the agreement entails, how it will work, and its duration have, for the time being, received answers. The joint statement released yesterday by officials from both countries expressed hope that the goal is a more detailed and stronger bilateral agreement and that it will eventually be reached. While the Union government claims the agreement as a major achievement, indications suggest that the benefits may go mainly to the United States. The framework has revealed partial information on products that are included in and excluded from the scope of the agreement. The U.S. administration has made it clear that the agreement aims to achieve trade worth 50,000 crore dollars with India within five years through imports. Washington proudly claim that the deal opens up a vast global market for American farmers and manufacturers. At the same time, under the agreement, India will have to pay additional duties even on imports that previously attracted lower taxes. Many products that were earlier imported at below 10 per cent will now attract more than 25 per cent duty, including the 18 per cent tariff announced by Trump. At the same time, Commerce Minister Piyush Goyal has attempted to conceal from the world by saying that duties on U.S. products that are required domestically but not produced locally have not been reduced or removed. The minister did not disclose at the press conference on Saturday the provisions in the agreement regarding duty-free access for U.S. agricultural products.
Most of the provisions of the trade agreement prove the Opposition and farmers’ organisations right in claiming that it severely affects the Indian economy. The agreement’s terms, which increase duties on Indian imports while allowing U.S. imports duty-free, will deal a heavy blow to the already struggling agricultural and industrial sectors. The number of people abandoning farming due to unprofitability is likely to rise, further destroying the livelihoods of rural populations. The announcement that apples could be imported from the United States at a rate of 80 rupees per kilogram has sparked strong protests among apple cultivators. Apple growers in states such as Himachal Pradesh and Jammu and Kashmir are already facing hardships due to agreements previously signed with countries like New Zealand. Farmers in various sectors, including paddy and soybean, will also be adversely affected by the agreement.
Trump, who announced the trade agreement, had made it clear that India would stop buying oil from Russia and instead buy oil from Venezuela, a country that has recently come under U.S. control. Even before the agreement was announced, the Central government, aware of Trump’s wishes, had asked public-sector oil companies last month to reduce their purchases of Russian oil. Reports indicate that Indian companies have not placed orders to buy oil in April. India had been buying nearly four lakh barrels of oil per day from Russia. Russian oil was supplied to public and private companies in India at a price 20 per cent lower than the market rate. Buying oil from Iran in Indian rupees had also provided some relief. Oil is the largest component in the country’s import bill. If cheaper oil is not purchased, the total cost will increase. This will lead to a rise in domestic oil prices and, consequently, cause inflation. The Petroleum Ministry had already warned in advance that stopping Russian oil would lead to a price increase. At the same time, Russia has made it clear that India is free to buy oil from anywhere, that it does not purchase oil only from them, and that it has not been informed that purchases must be stopped. Even in the statements made by both countries regarding the agreement, there are contradictions. The central government is not prepared to address concerns about the agreement or speak factually. Ordinary people and vulnerable populations in India, including the farming community, are in tears; meanwhile, Trump keeps laughing.