US President Donald Trump announced the finalization of a trade deal with India on Monday, February 2, claiming India has agreed to eliminate all trade barriers on US products.<\/span><\/p>\n Trump claimed that India has also agreed to stop buying Russian oil and instead will buy more American and \u201cpotentially\u201d Venezuelan oil in the coming days.<\/span><\/p>\n As per the deal, the US will reduce its reciprocal tariffs on Indian imports to 18% from 25% and withdraw the 25% additional tariffs imposed on India.<\/span><\/p>\n The US had initially imposed 25% tariffs on Indian imports in August as a part of its reciprocal tariff regime. It then also imposed an additional 25% tariff as penalty for importing Russian oil and allegedly helping its war efforts in Ukraine.<\/span><\/p>\n As per Trump\u2019s announcement, India\u2019s new reciprocal tariff rate is lower than its other Asian competitors in US markets, such as Indonesia (19%), Vietnam, and Bangladesh (20%).<\/span><\/p>\n Hours after Trump\u2019s announcement, Indian Prime Minister Narendra Modi thanked him, <\/span>claiming <\/span><\/a>the deal will benefit the people and \u201cunlock immense opportunities for mutually beneficial cooperation.\u201d<\/span><\/p>\n India has also agreed to buy over USD 500 billion worth of oil, coal, technology and agricultural products in the coming days, Trump claimed.<\/span><\/p>\n This is more than ten times the value of the current annual Indian imports from the US.<\/span><\/p>\n The US is India\u2019s largest trading partner, with total trade between both the countries exceeding 131 billion USD in 2024-25. India bought a total of USD 46 billion worth of American products while it exported around 84 billion USD worth of goods to the US in that year.<\/span><\/p>\n This is the second such deal India has signed in the last few days. Last week it signed a <\/span>Free Trade Agreement (FTA)<\/span><\/a> with the EU, agreeing to lower or eliminate tariffs on over 96% of all imports from the region. In return, the EU agreed to reduce or eliminate tariffs on 99% of imports from India.<\/span><\/p>\n Both the deals have been criticized by India\u2019s opposition parties, who have expressed apprehensions about the possible negative impact on the country’s domestic industry and agriculture. They have also hinted at the Indian government\u2019s failure to resist pressure.<\/span><\/p>\n The opposition parties in India claimed that the trade deal announced by Trump is \u201cimbalanced\u201d and looks like a \u201csurrender\u201d of the country’s crucial interests.<\/span><\/p>\n The main opposition, the Indian National Congress (INC), <\/span>questioned<\/span><\/a> the Indian government\u2019s failure to resist Trump\u2019s unilateral declarations about India not buying oil from Russia, calling it a violation of India\u2019s sovereign rights.<\/span><\/p>\n It also questioned the government’s intentions behind removing all tariff and non tariff barriers on imports from American goods as harmful for Indian traders, industrialists and farmers.<\/span><\/p>\n Trade in agricultural goods is a sensitive matter in Indian politics due to its possible impact on the livelihoods of a substantial number of India\u2019s population.<\/span><\/p>\n Almost 40% of India\u2019s workforce is directly involved in agriculture. Farmers have been <\/span>agitating<\/span><\/a> for adequate prices for their produce for years now, claiming agriculture is no longer profitable for the majority of its farmers.<\/span><\/p>\n They have made a call for a nationwide strike on February 12, opposing the government’s policies which include the earlier trade deals with the UK and the EU.<\/span><\/p>\n The negotiations for the deal began months ago before Trump\u2019s tariffs. It was reported earlier that the deal was stalled due to disagreements over US demands of access to India\u2019s agricultural market.<\/span><\/p>\n Even Modi had claimed last year that he would never compromise on the interests of India\u2019s farmers and fishermen, irrespective of the cost.<\/span><\/p>\n The opposition is claiming that the Indian government has now compromised on the interest of India\u2019s millions of farmers by opening the Indian market to US agricultural products.<\/span><\/p>\n \u201cEliminating tariffs will result in flooding the country with US goods, which will adversely impact industries and workers\u2019 livelihoods. Removal of non-tariff barriers would mean eliminating subsidies and other measures which support Indian farmers, the Communist Party of India (Marxist) said <\/span>in a statement<\/span><\/a> on Tuesday.<\/span><\/p>\n Several commentators in India also questioned the wisdom behind India buying more oil from the US.<\/span><\/p>\n India is the world’s third largest oil importer. The import of oil is one of the major reasons for the trade imbalance in the country. Expensive US oil, replacing the cheap Russian resource would make India\u2019s import bill heavier.<\/span><\/p>\n The Modi government must take the parliament and the entire country into confidence and share all the details of the deal, both the CPI (M) and INC <\/span>demanded<\/span><\/a>.<\/span><\/p>\n Even in the US, a coalition of over 800 businesses called \u201cwe pay the tariffs\u201d opposed the deal, claiming there is nothing for Americans to celebrate in it.<\/span><\/p>\n It noted that US tariffs will go up from 2% or 3% before the deal, to 18%, which is around a 600% increase in taxes which will be paid by the Americans, <\/span>Reuters<\/span><\/i> reported<\/span><\/a>.<\/span><\/p>\n Trump\u2019s reciprocal tariff regime is facing litigation in the US Supreme Court and it may be struck down as illegal.\u00a0<\/span><\/p>\n The post India trades in Russian oil for 7% reduction in US tariffs<\/a> appeared first on Peoples Dispatch<\/a>.<\/p>\r\nSurrendering to US dictates<\/b><\/h3>\n
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