The opposition is criticising the agreement, particularly on agriculture…
The agreement is very fair and balanced. It actually leaves no scope for criticism. It protects all of India’s sensitive interests and provides huge opportunities for our labour-intensive sectors. It opens the floodgates to technology, which India needs to become a superpower, to become a global economy and investments for that. It will provide a great impetus for exports, both of goods and services.
The narrative in some quarters is that India is giving much more than it is getting. How do you respond to this?
I monitored social media in the last week very extensively and I can correct your perception with data to show you the overwhelming support for this first tranche of the BTA (bilateral trade agreement). There is a small Congress-related ecosystem, many of them possibly from outside India, and it is their job to oppose… (they) have not yet raised any substantive issue. As regards giving away more and receiving less, all trade agreements are very equitable and have to be a win-win for both parties. In our case, we are very conscious of national interests and public interest. We’ve done a very calibrated opening of the Indian market, focused on job creation in India and areas of our interest, and protected sensitivities. I, with full responsibility, say there is no scope to find fault in this agreement.
What would you tell India’s farmers at this stage?
Well, I’ll tell India’s farmers that all the sensitive items in agriculture have been fully protected with a very carefully crafted exclusion list, where we have given no concessions whatsoever. Broad categories, among others, include dairy and all GM foods, where there is no opening. No concessions on soy meal, corn, cereals like rice and wheat, sugar, meat and poultry, millets, fruits like banana, strawberries, cherries, citrus fruits, pulses like green pea, Kabuli chana, moong, oil seeds, certain animal feed, non-alcoholic beverages, flour, starch, essential oils, ethanol for fuel, tobacco. All these are excluded from any concessions. Frankly, after this, there is no cause left for any farmer to complain. There are certainly certain products we have been importing for many years, from the time Congress was in government. That time also you had soybean oil and tree nut imports. So, there are certain items where India does not have enough production, which we continue to import. There is an opening done in a very calibrated manner.Did the successful clinching of the EU deal create an environment for the US to move ahead quickly?
Every trade deal stands on its own feet and on its own strengths. It’s a matter of coincidence. Both deals have been under negotiation for a long time. EU (took) much longer; it started in 2006. It’s very sad that the Congress and its partners could not close that deal despite intense negotiations. The Europeans were so frustrated that they gave up on India…We had elections in mid of 2024 and the EU in the third quarter of 2024. They appointed a new trade commissioner (Maros Sefcovic) on December 1, 2024, who is one of their most seasoned commissioners. Their intention was that they wanted to have a robust agreement with India. So clearly, from around January last year, negotiations intensified. So, both these trade agreements were concluded almost simultaneously. The EU between January 2025 and January 2026, and the US, between March 2025 and almost January 2026.
How will this $500 billion purchase intent that’s part of the deal work, and does it take away from any of our other trade partners?
India, even today, imports about $45-50 billion worth of goods from the US. These are goods which we need in India to power and grow our economy. We import aeroplanes, engines, and their spare parts. We already have orders worth $50 billion for aeroplanes, plus orders for engines and spare parts, probably $88 billion or so. I’m told by our airline operators that they want to further increase orders. They need more planes; India’s demand is growing so rapidly for air travel. So we need at least $100 billion of aviation-related equipment in the next five years.
Our steel production, at 140 mt, is slated to grow to 300 mt. Coking coal imports too are set to increase substantially. We need sources for our energy requirements. Today, the imports of data centres, AI machinery, quantum computing equipment, and ICT (information and communications technology) products are growing at almost double-digit plus… 15-20%. When you look at the context of all of these imports, where we have no choice but to import… precious metals, we continue to import, and it’s not from today, all these have been imported for decades. We estimated that even today, about $300 billion of our imports are only in these limited products I mentioned, which will be required in large quantities. In the next five years our estimate with the growth that we are demonstrating is that just these products, we need $2 trillion in the next five years. So when I talk to America and say our intention is that we should import at least $500 billion, I think we can even do more than that. It’s for the importers in India and exporters in America to get a good deal and strike bargains.
Why should we have only two countries from which we get coking coal? The more the merrier-we get better prices, better deliveries. On ICT products, is there any other country that can be a trusted partner of India to provide us with chips like Nvidia chips or provide us with AI equipment? They are the only country that has all of this equipment. And look at the budget announcements. We will need all of these for our AI mission, permanent magnet mission, data centre mission. Our energy needs are growing 5-8%. In all of these products, competition only makes Indian purchasing more efficient for better for our consumers. If India has to become a $30 trillion economy by 2047, these will be the drivers of that growth story.
The framework talks about coordination on non-market policies of third parties. What is it alluding to, and how will this play out specifically in the backdrop of India’s relationship with China?
I think you are assuming something here. India and the US are two of the world’s largest democracies. We have fair play and open market policies. We don’t create unfair trade barriers. Both are known to have very good quality standards and focus on fair pricing and fair play. And, therefore, we believe we should encourage greater trade among like-minded countries, which is the intention of that paragraph.
India, for some time, has been aspiring to emerge as an alternative place of manufacturing-the China+1 strategy. With this development and FTA with the EU, how do you see it being reinforced?
I have very often said India does not depend on anybody else’s focus to diversify from any particular geography. We understand that all companies would like to have diversified and more resilient supply chains. We wish to see India as a part of those resilient supply chains, but on our own strength, our capabilities, and not because it’s a compulsion of another country.
Typically, India’s conventional trade agreements are in perpetuity. But this is not a conventional trade pact. Is this also in perpetuity?
The US-India relationship is in perpetuity. Our partnership and strategic cooperation is in perpetuity and, therefore, trade will be in perpetuity. Robust, fair trade is what we would like to encourage.
The framework talks about addressing “discriminatory and burdensome” practices in digital trade. What is it alluding to?
India is one of the most important providers of digital services to almost the entire world today. Our IT and digital services sectors have grown rapidly. The US is a very important market. Likewise, the US has huge capabilities on technology related services. We would like both countries to work in a spirit of cooperation and engage with each other with more opportunities for our businesses. To ensure that on both sides there’s free flow, easier working conditions and ensure that at any point of time, we continue to give the most preferred status to each other and remove any roadblocks or impediments to greater digital trade between the two countries. Which is why you would also observe in the same agreement that we have talked of ICT products-where we need equipment from the US and we need their continued support to ensure that the trade in technology products, including GPUs and other goods use in data centres. (This) will be a part of our joint technology corporation.
Data protection has been a matter of contention between the two countries. Will these concerns be addressed?
Every country in the world looks after its people’s data. But at the same time, in an interconnected world, it is important to also have the ability to move data faster and ensure that data becomes a driver of the growth engine of your economy. So, our effort will be to leverage the huge amounts of data that we have, not bring impediments on its utilisation or conversion into economic activity, at the same time, ensuring the protection of data and the privacy laws being respected.
Will the ICT import licensing arrangement be on a case-by-case basis or a mutual recognition regime?
On ICT products, we want our requirements to be met by trusted partners. And, therefore, we should look at expanding relations and expanding trade between countries who believe in fair play and equal opportunity to trade inter se. Therefore, we are very keen to expand our technology collaborations. This is a broad framework; details will be worked out soon.
Would we be able to impose digital taxes, if required?
We are already at the WTO working on ecommerce moratorium, which is a part of our global agenda. One must not forget that today, with India’s large amount of digital services, we have to tread with caution on this subject. It is a sword that cuts both ways.
India now has trade deals with developed nations. In the past, Indian industry has been found wanting in taking advantage of these pacts. How are you gearing up the industry?
I am intensely engaged with the industry. I am working with them to help them grow, expand their scale of operations, think outwardly, focus on quality, think big and get out of the cosy comfort of the large Indian market. I have been receiving very good feedback. There is a sense of enthusiasm and excitement about the new opportunities. Earlier, we did not have free trade deals with developed countries. There was always a sense of fear that they would not be able to compete with other countries and export to those geographies at lower duties. Now we have the lowest duty. For example, in the EU, all textiles are at zero duty, and in the US, we have the lowest duty on textiles. Our textiles sector is raring to go.
On pharmaceuticals, the framework links tariff relief to Section 232 investigation. Is that a risk for the sector?
Under 232, they investigate products under national security and put a rate for all countries. On pharmaceuticals, the investigation is ongoing. Therefore, we cannot write a rate. We don’t know what the investigation will come up with. Our understanding is that we will get zero duty, but we will wait for the investigations to be completed before we convert that into action.