New Delhi: Prime Minister Narendra Modi is receiving praise for the recently announced trade deal between India and the United States, even as the opposition voices concerns regarding the potential impact on the agriculture sector. The agreement, finalized after discussions between Modi and US President Donald Trump, involves Washington reducing tariffs on Indian goods from 25% to 18%.
Indian government officials, including cabinet ministers Ashwini Vaishnaw and Piyush Goyal, have confirmed that a trade deal has been reached. Modi expressed his appreciation to President Trump for the tariff reduction on Indian goods. Industry leaders anticipate that this agreement will bolster India's position as a global manufacturing hub. ICEA Chairman Pankaj Mohindroo stated that the agreed-upon 18% rate would keep India competitive relative to other manufacturing countries.
The Indian Rice Exporters Federation (IREF) expressed optimism that the tariff reduction would restore price parity with competing nations and significantly increase shipment volumes. IREF National President Prem Garg believes that the revised tariff structure would place India on par with competitors such as Thailand and Pakistan.
However, the agricultural sector has emerged as a focal point of contention. US Secretary of Agriculture Brooke Rollins stated that the deal would result in increased exports of American farm products to India, boosting prices and benefiting rural America. Rollins noted that the US had a $1.3 billion agricultural trade deficit with India in 2024, adding that India's growing population presents a significant market for US produce.
Conversely, the Indian government has been less forthcoming with specific details, particularly concerning agriculture. This has fueled speculation about possible concessions made by India, especially regarding sensitive sectors like dairy. The opposition Congress party has demanded clarity on the agreement, raising concerns about the opening of the agriculture sector and its potential impact on Indian farmers. Some have voiced concerns about increased imports of US products like almonds, walnuts and apples affecting farmers in regions with similar climates, such as Himachal Pradesh and Kashmir. There are also worries that relaxed rules on GM-free certification or cultural requirements could negatively impact small-scale dairy farmers.
Despite these concerns, Commerce Minister Piyush Goyal has emphasized that the dairy and agriculture sectors are protected under the trade deal. He stated that Prime Minister Modi has always supported these sectors and worked to ensure more opportunities and income for those employed in it. Goyal also highlighted the deal's potential to unlock opportunities for farmers, MSMEs, entrepreneurs, and skilled workers, framing it around "Make in India for the world, Design in India for the world, and Innovate in India for the world".
Amidst the differing perspectives, it is also important to note that President Trump stated that India has agreed to stop buying oil from Russia and to buy more oil from the United States and potentially Venezuela. A White House official confirmed that the additional 25% penalty on Indian imports, which was imposed due to India's purchase of Russian oil, would be dropped as part of the agreement.
While the Modi administration touts the trade deal as a significant achievement that will boost economic growth and strengthen ties with the US, the opposition remains cautious, emphasizing the need for transparency and a thorough assessment of the agreement's implications for Indian farmers.