An ex-diplomat and a strategic affairs expert also said while the tariff reduction is a “major relief”, a comprehensive bilateral trade agreement will “take a while to achieve”.
“I see this something as a very good development, something that India has been expecting for a while. It’s going to help us in many ways, mainly in labour-intensive industry, but it is also going to open up new ways in which we can partner wit the US in other fields like technology, etc. Overall a good development,” former ambassador Anil Wadhwa told PTI.
Wadhwa, who has served as India’s envoy in Italy, Poland and Oman, described it as a “positive development” from both India and US sides.
“The major relief is the reduction in tariff from 50 per cent to 18 per cent, and that will be very helpful,” he said.
Leading business chambers and think-tanks have also welcome the deal announced by Trump, saying it is a “first step” toward a comprehensive bilateral agreement that will unlock more private sector collaboration and help clear a pathway to work on other pressing matters.
Wadhwa said, when it comes to the bilateral agreement, major issues on the table include “data storage, e-commerce, our internal regulations”.And, India will have to be “negotiative to see how much we can accommodate the US,” but for the foreseeable future, “I don’t see that happening, it is going to take a while”.
On January 29, the Ministry of External Affairs in a written response had told the Rajya Sabha that the US remains one of India’s largest trading partners, and “both sides are currently engaged in negotiations on a mutually beneficial multi-sectoral Bilateral Trade Agreement (BTA)”.
India’s former envoy to the US, Harsh Vardhan Shringla described it as a “historic deal” and said the reduction in tariff will entail a “huge advantage to our exporters”.
And following up with the recent EU deal, “if that is the mother of all deals, this is the father of all deals,” he claimed.
On January 27, India and the European Union (EU) announced the conclusion of negotiations for a free trade agreement (FTA).
“The trade deal was concluded yesterday based on conversation between the Prime Minister of India and the President of the United States. We know the broad contours of the deal, details are yet to be… and details will be worked out by officials, etc. What is important and this is what the Opposition has to take note of is that the figure that is being given: 18 per cent,” Shringla said.
He pointed out that this figure, which would decide the scope of access for exports to the US, is lower than the figures for any other country which is a competitor of India — lower than that of China, Vietnam, Indonesia, Pakistan or Bangladesh.
“That is a huge advantage to our exporters. We are going to see a surge in exports to the US. That is what the opposition should be happy about,” Shringla, also a Rajya Sabha member, said.
Indian Ambassador to the US Vinay Kwatra termed the trade deal a “big win” that creates vast new opportunities for the two economies.
“A big WIN for a consequential partnership under the leadership of Prime Minister Narendra Modi @narendramodi and President Donald Trump @POTUS,” Kwatra said in a post on X early on Tuesday.
He said that the deal will create “new opportunities for the two economies and the people of our two great nations. Today’s announcements herald an exciting new phase in our partnership.”
Veena Sikri, who served as India’s high commissioner to Bangladesh from 2003-2006, describe the development as a result of “quiet diplomacy” for last several months.
“It is difficult to identify one key turning point, but certainly there’s been a lot of quiet diplomacy for the last eight months, and very calm and restrained. And I think the most important aspect is that India’s response at every stage was very calm and restrained. There was no histrionics, no anger. It was very, very subdued and very collected,” she told PTI when asked about the deal.
“And this has been greatly appreciated by all countries of the world that India has really conducted itself in the most appropriate and diplomatically superior and statesman-like manner,” the former envoy said.
Sikri said even in the backdrop of this development in India-US ties, there’s a “good scope” for India and Russia improving their bilateral trade, “even if the purchase of Russian oil stops”.
“And I think that there’s enough progress on defence security between India and Russia, and that aspect of India-Russia relations will remain positive and will remain unaffected by this trade deal,” she said.