By bizn_fun 
Tariff-related uncertainty was one of the many reasons for India’s rising trade gap, falling rupee and a flight of foreign money from the country last year. The 18% tariff now brings the rate in line with India’s peers in Asia such as Vietnam, Thailand and Bangladesh who pay duties between 19% and 40% on US exports.
“This greatly boosts India’s appeal as an alternative to China for the reconfiguration of supply chains. Indeed, India still offers many other advantages that other manufacturing hubs can’t, including low labour costs, political stability and a large domestic market for MNCs to sell to as a hedge against future tariffs,” Shilan Shah of Capital Economics said in a note.
India’s textile exporters also cheered the announcement, with the Confederation of Indian Textile Industry saying the deal will allow them to “compete effectively in the US market, the single-largest market for India’s textile and apparel exports”.
But trade experts warn that there’s much that’s still in the realm of speculation, and Delhi should not rush to celebrate just yet.
“The Truth Social post [by Trump] leaves major questions unanswered – what products are covered, what the timelines are, and whether India has really agreed to zero tariffs and zero non-tariff barriers, especially in sensitive areas like agriculture and regulated imports,” said Ajay Srivastava of the Delhi-based Global Trade and Research Initiative (GTRI) think-tank.
According to US Secretary of Agriculture Brooke Rollins, under the deal, the US will “export more American farm products to India’s massive market, lifting prices, and pumping cash into rural America”, helping reduce the US’s $1.3bn agricultural trade deficit with India.
But Delhi has refrained from commenting on this politically sensitive issue. Greater access to farm produce was one of the biggest sticking points in the negotiations, given 50% of India’s population depends on agriculture for their livelihoods.
GTRI also cautioned against Trump’s claims that Modi had committed to “Buy American” and purchase more than $500bn worth of energy, technology, agricultural and other goods, given that India’s current annual imports from the US are under $50bn.
“Until there is a joint statement, negotiated text, and clarity on enforceability, this should be treated as a political signal – not a concluded trade deal. Caution, not celebration, is warranted,” said Srivastava.