PM Modi and Trump
The talks between India and America regarding the trade agreement have intensified. US President Donald Trump has recently indicated that this agreement with India could be like his trade agreement with Indonesia. But concern is being expressed that if this happens, then India’s domestic industries, especially agriculture and dairy sector can be damaged. Come, let us understand in detail that if Trump imposes tariffs like Indonesia on India too, then how and how much damage can be caused to India.
Trump gave signs of agreement like Indonesia
Trump, against a reporter of Navbharat Times, recently told reporters that the trade agreement with India would be like the Indonesia model. Indonesia has allowed American goods to arrive in its market without any restriction. At the same time, the US has imposed 19% tax on Indonesia goods. In addition, Indonesia has promised to buy $ 15 billion energy from the US, $ 4.5 billion agricultural products and 50 boing jets. Trump says that India will have to adopt a similar path, so that American goods will be able to sell easily in the Indian market.
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Trump said, “India is also working in this direction. Now we will get access to the market of India. Earlier our people were not able to go there, but now through tariff we are getting this opportunity.” This means that the US wants India to open its market completely for American goods.
Indian party is talking in Washington
There is a process of talks between India and America regarding this agreement. A team of the Indian Ministry of Commerce is in Washington these days. This is his fifth tour. Issues related to agriculture, vehicles and other sectors are being discussed between the two countries. The US has postponed the additional tax imposed on many countries including India till 1 August, due to which this conversation has become even more important.
Bangladesh, Cambodia and Indonesia are suffering a lot of damage in the textile industry due to American tax
Trump’s unilateral agreement will harm the country
Think Tank Global Trade Research Initiative (GTRI) has expressed concern about this agreement. He says that if India makes such a “unilateral” agreement, then especially our dairy and agricultural sector can suffer a huge loss. America goods will be easily sold in India without tax, but India’s goods will become expensive in America. When cheap goods of America come here, the sale of products of indigenous companies will also be affected. This will remove the country’s money and will also have a negative effect on our economy. Also, due to low demand for indigenous goods, their prices may fall, due to which companies may suffer losses.
GTRI founder Ajay Srivastava has warned that, “If India makes a wrong agreement in a hurry without seeing any mutual benefit, then this situation may be worse. India should make transparency in dialogue and do not make any agreement that can harm our economic interests in a long time.”
What issues are it stuck on?
Many issues have not been agreed between India and America yet. The US wants India to give tax exemption on its agriculture and dairy products, but India has not given any such exemption to anyone in the dairy sector so far and this time too, it is taking a strong stand on this matter. At the same time, India is asking the US to remove 50% tax on its steel and aluminum and 26% tax on automobiles. India has also made it clear that if needed, it has full right to impose counter tax under the rules of the World Trade Organization (WTO).
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America wants tax exemption in certain sectors, such as industrial goods, electric vehicles, liquor, petrolation, and dairy-revolutionary products. At the same time, India is also seeking tax exemption for its important sectors, such as cloth, gem-jewelery, leather, apparel, plastic, chemicals, shrimp, oilseeds, grapes and bananas. Millions of people work in these sectors and they are very important for our economy. If these sectors are ignored, then India may suffer a big loss.
Donald trump tariff
How long will the agreement be reached?
The two countries are trying to complete the first phase of bilateral trade agreement (BTA) by September-October this year. Earlier, an interim agreement is also going on. That is, there can be a small agreement first, after which there will be a big agreement. However, India will have to be vigilant so that there is no agreement that can harm its interests.
India needs to be vigilant
This agreement between India and America can be beneficial for both countries, provided it is done thoughtfully. India will have to protect its domestic industries, especially small farmers and dairy sectors. If India compromises on the terms of America, then there may be a flood of cheap American goods in the Indian market, which will cause damage to local industries.