AFP
Indian exporters hailed on Tuesday US President Donald Trump’s announcement of a trade deal and pledge to slash tariffs, capping months of uncertainty, while analysts urged caution citing a lack of clarity.
Trump said the agreement came together after India’s Prime Minister Narendra Modi promised to stop buying Russian oil over the war in Ukraine, adding that he would lower levies from 25 to 18 percent.
The US president also said New Delhi had agreed to purchase more than $500 billion worth of American energy, technology, agricultural, coal and other goods.
An extra 25-percent toll imposed over India’s Russian oil purchases was also removed, a White House official told AFP.
As Washington struck deals with most governments since Trump unveiled sweeping tariffs in April last year, India had struggled to follow suit.
The lack of a pact had rattled investors for much of last year and prompted foreign funds to pull more than $20 billion from Indian markets, while hammering the rupee.
But Trump’s announcement late Monday was welcomed by markets, with Mumbai’s benchmark Nifty index jumping nearly five percent at the open, but giving up some gains to end 2.55 percent higher at the close of trading.
Piyush Goyal, India’s commerce minister, said the deal was the “best” among those Washington had reached with governments in the region.
“I can assure the people of India that this is a deal that will make every Indian proud,” he told reporters in New Delhi.
Opposition leader Rahul Gandhi criticised the deal, saying it was signed under pressure from Trump.
“Modi has sold your hard work in this trade deal because he is compromised. He has sold the country,” he said.
– ‘Rapid surge’ –
The Federation of Indian Export Organisations (FIEO) called the agreement the “father of all deals”, adding that several sectors would see a “rapid surge in orders”.
“It is extremely good news,” FIEO director general Ajay Sahai told AFP. “Indian exporters will now be equally competitive” compared to other “rivals in the region”.
Sahai said apparel and footwear manufacturers, who had seen orders delayed because of the high US duties, would feel immediate relief.
“Normally orders for the upcoming (summer) season are finalised by December. But a number of orders were put on hold due to the tariffs. Now that will start moving back to India.”
Despite resilient shipments of smartphones and generic drugs — which were exempted from the original tolls — labour‑intensive sectors such as marine products and gems and jewellery had been hit hard.
G. Pawan Kumar of the Seafood Exporters Association of India estimated Trump’s earlier 50-percent tariff had led to a 15-percent year‑on‑year drop in export volumes to the United States between April and November.
“We are confident that with the conclusion of the trade deal… export of seafood from India to USA will show an increase and soon reach previous levels,” Kumar said in a statement.
– ‘Bigger picture’ –
But analysts pointed to the lack of clarity on several aspects of the deal, including Trump’s claim that India would “move forward” to cut its tariffs on US goods to “zero”.
Negotiations had repeatedly stumbled over India’s refusal to expose its politically sensitive agriculture sector to greater US access.
“We will gain from this deal. But I’m actually worried that there is a bigger picture and that is not very clear,” Indian economist Biswajit Dhar told AFP.
He added that New Delhi had committed not to open up agriculture, but Trump’s announcement “gave initial indications that the US was getting access to agriculture”.
Analysts also said the timeline for Trump’s claims that India would ramp up purchases of US energy and tech needed clarifications.
“The headline figure of $500 billion in purchases is unclear,” said Ajay Srivastava of the Global Trade Research Initiative, a Delhi-based thinktank, in a note.
“India currently imports less than $50 billion a year from the US. This looks more like an aspiration than a commitment. Until there is a joint statement, negotiated text and clarity on enforcement, this should be seen as a political signal — not a final deal.
“Caution, not celebration, is needed.”
AFP
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