“Based on the social media posts, firstly by President Donald Trump and subsequently by Prime Minister Narendra Modi, one thing which is clear is that there is some sort of an understanding between the United States and India that United States will impose 18% reciprocal tariffs on Indian exports, whereas India will bring down tariffs to zero.”
That was Abhijit Das, trade specialist and former head of the Centre for WTO Studies in Delhi, giving his views on The Gist, that the US and India have an understanding on the year long negotiations on a bilateral trade agreement.
But as he underscored, “We don’t know on a large percentage of products or what percentage of products. President Trump has claimed that India has agreed not to buy Russian oil. And second, President Trump has also claimed that India is giving a commitment to buy $500 billion of US energy products called agricultural products.
“On both these aspects, we do not have any confirmation from the Indian side. So while we may have a deal, what are the contours of the deal? What has been agreed to? What is the fine print? Is it merely a framework agreement, or is this a detailed deal the way United States up agreed with Malaysia and Cambodia? We don’t know.”
Important to note that while there is relief in India on the tariff coming down from 25% to 18%, under WTO rules even this is not legal. The WTO requires equal treatment for all members, but the US is levying higher tariffs on some, lower on others.
Das does not think India will challenge the 18% tariff when it did not challenge the 25% tariff.
“At the WTO, India never directly or indirectly challenged the United States reciprocal tariffs, I would be indeed extremely extremely surprised if we end up challenging this 18% tariffs,” he said.
Nor is it clear if India is opening up its agricultural markets, which the US Department of Agriculture claims is the case. India could give the US lower tariffs for certain fixed quantities of apples, corn or soyabean imported every year.
Tune in for more in this conversation with Abhijit Das, trade specialist and former head of the Centre for WTO Studies.
