india us trade deal
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IA new and historic chapter is going to be added in the relations between India and America. The recently signed bilateral trade deal is going to prove to be a ‘game changer’ for the Indian economy. The latest report of SBI Research shows that in this deal America has completely opened its doors for India. Now the ball is in India’s court to see how it capitalizes on this opportunity. If everything goes as per plan, then the coming days may be full of profits for Indian exporters and common businessmen.
Not only profit, GDP will also get wings
The biggest impact of this deal is going to be on our economy and your pocket. According to SBI analysis, with this agreement India’s trade surplus with America can increase by $ 45 billion. If we understand in simple language, we will sell more goods from America than we buy from them. This figure is so big that due to this, India’s total surplus can exceed 90 billion dollars annually.
The most important thing is that there has been a huge reduction in the tax (tariff) imposed on Indian goods. Reciprocal tariff has been reduced to 18%. This simply means that now Indian goods will be cheaper and competitive in the American markets compared to Vietnam and other Asian countries. Its direct impact will be visible on the country’s GDP, which is estimated to increase by about 1.1%.
Sale of these 15 things will change the situation
America is the largest market in the world, where goods worth more than 3 trillion dollars are imported every year. Till now India had only 3% stake in it, but now this is going to change. The report mentions ‘unmet demand’ i.e. a demand which had not been fulfilled till now. Now India will fill that empty space.
SBI believes that only top 15 product categories can change the fortunes of India. These include electrical machinery, pharmaceuticals (medicines), engineering goods, gems and jewelery and textiles. There is a big gap between America’s demand and India’s supply in these areas, which will now be bridged. It is estimated that the export potential will cross 100 billion dollars annually. This is a golden opportunity for expansion not only for big companies but also for small and medium enterprises (MSMEs) working in these sectors.
Open lottery for agriculture sector
Often the benefits of big trade deals are considered limited to the corporate world, but this agreement has also brought good news for India’s agriculture sector. Under this deal, about 75% of India’s agricultural exports will no longer be subject to any additional duty (Zero Additional Tariff) in America.
Our farmers, fishermen and plantation owners will directly benefit from this. Export of products like rice, spices, tea, coffee, cashew and seafood will now become easier. America already buys 25% of its rice requirement from India, and now with the lower duty the demand for Indian products will increase further there. This will increase the inflow of foreign exchange into the rural economy, which is expected to bring prosperity at the grassroots level.
China’s game over? India will become the world’s factory
This deal is not limited to just trade, but it is also a strategic victory. This is being seen under the ‘China + 1’ strategy. Companies around the world now want to reduce their dependence on China for their supply chains, and India has emerged as the strongest option for them.
India has also shown generosity and expressed its intention to buy products like aircraft, energy and technology worth 500 billion dollars from America in the next five years. With this, America will also remain interested in India. American companies can now increase investment in India, especially in the field of electronics and technology. This is a big step towards making India a global manufacturing hub.
