Indo-US trade deal is not a surrender

In the agricultural segment, India has avoided major concerns and opened the doors with caution and quota systems

- ASHOK GULATI

LET ME STATE at the very outset that anyone who thinks that exports are always good but imports are bad does not understand trade policies.

There has been lot of noise in the Indian parliament over the Indo-US trade deal. The opposition feels that the deal is a total surrender. But the government benches projected it as the best deal under the given circumstances. The truth may be somewhere in between. There is always a give and take in any trade deal. This one is no different.

India had to give in to the US’s demand for buying more energy, aircraft, and high-tech equipment. Also, we had to agree to show our “intent” or “commitment” to buy $500 billion worth of goods from US over the next five years. That looks huge as our current imports of goods from the US are well under $50 billion a year. But in return, India got the US to slash its import tariffs on Indian goods from 50% to 18%, which is very much in line with our competitors in South and Southeast Asian countries, and almost half of what is being imposed on China. This, the government says, is the biggest victory and opens doors for significantly higher exports from India to the largest economy in the world.

Opposition parties as well as some farmer groups have also expressed strong apprehensions about the agricultural segment of the trade deal. Let me dwell on it and try to clear some misgivings.