In a sharp attack on the BJP-led central government on the recently announced India-US trade, Congress MP Shashi Tharoor on Tuesday said the deal looks less like a free trade agreement than a pre-committed purchase agreement that “overturns every principle of reciprocity.”
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“How can we speak of a reciprocal tariff of 18 percent on one side and zero percent on the other?,” Tharoor said in the Parliament in the ongoing Budget session. The senior Congress leader pointed that India’s total bilateral trade with the US is roughly 130 billion USD with a trade surplus of only USD 45 billion.
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“We have surprisingly promised to buy USD 500 billion dollars worth of American goods over five years. This effectively converts a surplus into a long-term deficit by executive assurance rather than by market demand,” he said as he critiqued further by saying that no major economy has “ever neutralized its own trade leverage in this manner”.
India-US trade deal
The trade deal was announced by US President Donald Trump last week under which the US agreed to reduce its tariffs on India to 18% and India will also remove and reducing tariffs on all US industrial, food and agricultural goods. The US will also end reciprocal tariffs on Indian goods such as medicines, gemstones and diamonds, and aircraft parts.
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As per the framework and US President Donald Trump’s announcement on, India has agreed to purchase $500 billion of US energy products, aircraft and aircraft parts, metals, coal and technology products for the next five years.
“While the US continues to impose import tariffs of up to 18 percent, we have committed ourselves apparently according to this joint statement that I’ve been seeing here, joint US-India statement, to impose tariffs up to 18 percent on Indian exports and we to slash tariffs to near zero levels,” Tharoor said on Tuesday.
‘Why India voluntarily surrendered its negotiating power’
He further said that the Parliament has neither been told how farmers, MSMEs, and domestic industry will be protected, nor why India has “voluntarily surrendered its negotiating power without securing proportional market access, without securing proportional market access or policy space in return.”
“I know the government will say wait for the final agreement, it’s coming in mid-March, but let them be aware these concerns exist right now,” he said. He said that the government’s claim that India secured a better deal than China, Vietnam, or other Asian economies does not withstand scrutiny. “
“While India has obtained a tariff reduction of one or two percentage points from them, no East Asian economy has agreed to deliberately dilute its trade surplus with the US through guaranteed purchase commitments,” he said.
Tharoor further said he was mentioning the trade deal in the context of budget since “key budgetary assumptions on trade balances, external financing needs, and overall macroeconomic stability rest on information that the Parliament does not possess and has not been given.”
“A budget framed amid such uncertainty is not just incomplete, it asks this House to approve numbers without knowing the obligations that may soon overtake them from this trade agreement,” he said.
‘Ping pong’ jibe over Russian oil question
He also attacked the Centre over the issue of Russian oil purchase and targeted the external affairs ministry and commerce ministry for dodging the questions on India’s stand on energy trade with Russia. “When the two ministers play ping-pong with each other, saying it’s not in their mandate to answer the question, each one attributes it to the other, then that looks like a rather disappointing game, because when no minister claims ownership of something like this, accountability disappears, and Parliament is left staring at a budget that conceals obligations that the government seems to lack the courage to admit openly,” Tharoor said.
One of the key conditions laid out by Trump while announcing the trade deal with India was that he said that Prime Minister Narendra Modi had ‘agreed to stop buying the Russian Oil’. However, no official statement from India has come on this. Commerce minister Piyush Goyal in a recent press conference said it was for the foreign ministry to answer the question on whether India would continue buying oil from Russia. The foreign ministry on the other side said it was under commerce ministry’s ambit to answer this.
However, foreign secretary Vikram Misri on Monday said India will maintain multiple sources of energy and diversify them to ensure stability, with national interest guiding all purchases.
