Treaty me right

India and the US have found a middle path, but the fine print of the trade deal might have some catches in it

- BY K. SUNIL THOMAS

For those who are thrilled by the announcement of a trade deal between India and the US, there is one name to remember. South Korea.

Last year, America’s eastern Asian ally was overjoyed when President Donald Trump worked out a trade deal with it in return for measures like raising the number of American cars that could be exported there and Korea’s dismantling of tariff and non-tariff barriers.

Then, disaster stuck. Last month, without any notice, Trump threw a tantrum and said he was raising tariffs on Seoul, alleging that the country was taking too long to ratify his deal. Last heard, the Koreans were scampering to Washington to figure out what had gone wrong.

They say the proof of the pudding is in the eating. For the just-announced US-India deal, this could be doubly so. First, beyond Trump's exuberant declaration that tariffs would be dropped from 50 per cent to just 18 per cent for merchandising exports, the details are still to be worked out.

And of course, the full bilateral trade agreement (BTA) is still in the works. This is just a preliminary step to get the vexing tariff issue out of the way.

Yet, for all practical purposes, Prime Minister Narendra Modi and his team seemed to have finally managed to wrench out of the vexing situation the nation was caught in. The US was India's biggest trading partner, and, more than that, there was a lot at stake. Being the world's most valuable market, it was too important to be lost, no matter what brave face you put forward by signing deals with the likes of the EU and the UK.

That is why it has been a cause of celebration, despite the fact that the fine print was yet to be revealed. Soon after Trump and Modi revealed the 'good news' on social media, businesses went on a celebratory mode. The Gujarat GIFT Nifty surged 800 points overnight, and the Bombay Sensex also rallied the following day.