Indian exporters hail Trump’s US-India trade pact and tariff cuts, but experts warn of unclear terms on agriculture and $500 billion purchase pledge.
MUMBAI: Indian exporters have welcomed a new US-India trade deal announced by President Donald Trump, which pledges to slash US tariffs on Indian goods.
The announcement ends months of uncertainty that rattled investors and saw foreign funds pull more than $20 billion from Indian markets.
Trump said the agreement followed Prime Minister Narendra Modi’s promise to stop buying Russian oil over the war in Ukraine.
He pledged to lower US levies on Indian goods to 18% from the 25% imposed last year.
A White House official said an extra 25% toll imposed over India’s Russian oil purchases was also removed.
Trump added that New Delhi had agreed to purchase more than $500 billion worth of US energy, technology, agricultural, coal and other goods.
Markets reacted positively, with Mumbai’s benchmark Nifty index jumping nearly 5% at the open.
The Federation of Indian Export Organisations called the agreement the “father of all deals”.
“It is extremely good news,” FIEO director general Ajay Sahai told AFP.
He said Indian exporters would now be more competitive against regional rivals and that orders for apparel and footwear, which had been delayed, would start moving back to India.
Despite the optimism, analysts urged caution citing a lack of clarity on several aspects.
Negotiations had repeatedly stumbled over India’s refusal to expose its politically sensitive agriculture sector to greater US access.
Economist Biswajit Dhar expressed concern over Trump’s claim that India would “move forward” to cut its tariffs on US goods to “zero”.
“The commitment from the Indian government was that it would not open up agriculture, but Trump’s post gave initial indications that the US was getting access to agriculture,” Dhar told AFP.
Others sought clarity on the $500 billion purchase pledge and its timeline.
“The headline figure of $500 billion in purchases is unclear,” said Ajay Srivastava of the Global Trade Research Initiative.
“India currently imports less than $50 billion a year from the US. This looks more like an aspiration than a commitment.”
Srivastava added that until there is a negotiated text and clarity on enforcement, it should be seen as a political signal, not a final deal.
Labour-intensive sectors like marine products had been hit hard by the earlier tariffs.
G. Pawan Kumar of the Seafood Exporters Association of India estimated Trump’s earlier 50% tariff led to a 15% year-on-year drop in export volumes to the US between April and November.
“We are confident that with the conclusion of the trade deal and lowering of tariffs to 18%, the quantum of export of seafood from India to USA will show an increase,” Kumar said in a statement.
