The Central Government has termed the historic interim trade agreement between India and America as a booster dose for the Indian economy. Finance Minister Nirmala Sitharaman and Home Minister Amit Shah have described this agreement as an important step towards realizing the dream of ‘developed India’. The government claims that this deal will not only connect micro, small and medium enterprises to the global value chain, but will also play an important role in reducing costs and creating employment.
Amit Shah said – ‘Make in India’ and boon for employment
Home Minister Amit Shah has described this agreement as turning Prime Minister Narendra Modi’s vision of ‘developed India’ into reality. He said that this interim agreement will give new impetus to India’s growth engine. According to Shah, the deal will prove to be a boom for ‘Make in India’, hardworking farmers, entrepreneurs, startup innovators and fishermen, and will also create massive employment opportunities for youth and women.
What did Finance Minister Nirmala Sitharaman say in her response?
Direct relief to MSMEs and consumers Finance Minister Nirmala Sitharaman on Saturday clarified that this framework will make it easier for India’s small and medium industries to access the global market. He said this would reduce costs for both businesses and consumers.
Explaining the mathematics of the tariff, he said that America will reduce the current 50 percent tariff on Indian goods to 18 percent. In return, India will eliminate or reduce import duties on all US industrial goods and a wide range of agricultural products. These US products include dried distillers grains, red sorghum for animal feed, tree nuts, fresh and processed fruits, soybean oil, wine and spirits.
What is the agreement between India and America?
The biggest aspect of this agreement is India’s intention to purchase $500 billion. According to the India-US joint statement, India will buy energy products, aircraft and their parts, precious metals, technology products and coking coal from the US in the next five years.
However, amid the concerns of the opposition, the Finance Minister’s office has made it clear that the sensitivity of the agriculture and animal husbandry sectors has been taken full care of. “This framework protects key agricultural and dairy products, spices and staples, which will strengthen farmers’ incomes,” he said in a post on X (formerly Twitter). This statement puts an end to speculations that American dairy products will be given a free hand in the Indian market.
India will become a hub in digital services
The government has also emphasized that this framework will further strengthen India’s lead in the digital services sector. The joint technology collaboration aims to establish India as a global hub for Artificial Intelligence, data and digital services. It is clear from the government’s reactions that they are not seeing this deal limited to just trade, but are presenting it as a big opportunity for manufacturing and employment. While the purchase commitment of $500 billion (Rs 45 lakh crore) is enough to please the US, the protective stance on ‘dairy and spices’ is an attempt to pander to domestic politics and the farmer vote bank.
