India and the United States announced an ‘interim’ trade deal on Saturday morning — slashing tariffs on key imports and expanding access for American goods. New Delhi will also remove non-tariff barriers for several sectors and eliminate taxes levied on certain food and agricultural products. The deal has been met with vehement criticism from Opposition leaders and claims that India had “surrendered” under external pressure.
“Modi makes India SurrenderLand – POTUS’ order says 25% tariff cut because India stops buying Russian oil. Section 4 says US to “monitor” India and any breach to face action. Piyush Goyal’s sarkari PowerPoint gives NO details, just silly blobs and Modi’s photo,” read a sharp tweet from TMC leader Mahua Moitra.
“The US will now monitor whether India is importing oil from Russia. If the US decides India has imported Russian oil directly or indirectly, the extra 25% tariff penalty is back. This is truly extraordinary. And we have accepted it! Naam Narender, Kaam Surrender,” jibed Congress leader Jairam Ramesh.
‘Humiliating failure sold as achievement’: Congress
Senior Congress leader Pawan Khera called the newly outlined deal framework a “humiliating failure” on Saturday. He alleged that India had acted under pressure to open up the agricultural market and halt the import of Russian oil. Khera also raised concern about the expected widening of the trade deficit while citing the plan for India to import $500 billion in American goods. The Congress leader opined that the rise in US imports would further weaken the rupee against the dollar.
“A famous dialogue from the film Deewaar is – ‘Main aaj bhi phenke huye paise nahi uthata‘ (Even today, I don’t pick up the money that’s been thrown at me). The tragedy is that the Modi government does pick it up. Tariffs that were once 3% have now been hiked to 18%, and celebrations are underway with sweets being distributed. This is a humiliating failure, being sold to the Indian public as an achievement,” he wrote on X.
“India’s annual imports from the USA will triple, wiping out our longstanding goods trade surplus. There will continue to be great uncertainty on India’s exports of IT and other services to the US. India’s exports of goods to the US will face higher duties than before…All the hugs and photo-ops have not amounted to much. Namaste Trump has scored over Howdy Modi,” added fellow party leader Jairam Ramesh.
He also took a cue from Mukesh’s iconic song from the 1964 film “Sangam” to insist that “dost dost na raha”.
What does India gain under the US trade deal?
“The United States will apply a reciprocal tariff rate of 18% on originating goods of India…and, subject to the successful conclusion of the Interim Agreement, will remove the reciprocal tariff on a wide range of goods…It will also remove tariffs on certain aircraft and aircraft parts of India imposed to eliminate threats to national security. India will receive a preferential tariff rate quota for automotive parts subject to the tariff imposed to eliminate threats to national security…” read an excerpt from the White House order.
- India will see tariffs slashed to 18% for textiles, apparel, leather, footwear, plastics, chemicals, home décor and machinery.
- Tariffs eliminated or reduced for Indian aircraft parts, generic pharma, gems/diamonds (post-probe).
- Preferential quota for Indian auto parts.