News that India and the US have reached an interim trade agreement dominated the news headlines over the weekend. And while initially details were sketchy, since then more details have emerged. And the more we know about the deal, the more it sounds like India has completely surrendered to America's demands.
The deal, which was unilaterally announced by President Trump via his social media, and not denied by India, means that India will not only completely stop buying Russian oil directly or indirectly but will also subject itself to monitoring by the USA over whether it continues to buy Russian oil or not.
If that wasn’t all, India has allowed a host of American goods to be imported into the country duty free, while simultaneously allowing itself to be subjected to an 18% tariff for its own goods that are to be exported to America. If one were to remember, before Trump began his second term, the tariffs on Indian goods into America were just 3%.
These zero tariff goods include farm produce that Indian farmers have been strongly objecting to. The joint statement refers to a wide range of agricultural products and name checks dried distillers’ grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits -- all products that could be hugely damaging to India’s farmers and farming community all of whom rely on labour intensive practices (as compared to the mechanisation of the USA) which thereby makes production more expensive.
If that wasn’t bad enough, India has also committed to buying US oil and other petroleum products as also those sold by the Venezuelan oil industry now controlled by the USA. The government of India has tried to justify this as a win for India, as something that will benefit India in the long term, and that India has not compromised on national interest.
However, the fact remains, that in agreeing to such a deal India has gone against several positions that it has held for long and fiercely defended. These include deliberate refusal to recognise unilateral sanctions -- the kind that the US has imposed on Russia and Iran. Allowing itself to be dictated to when it comes to who it can and cannot buy from, India has compromised itself on the world stage by surrendering its sovereignty to the dictates of a more powerful nation -- one which has been behaving as a bully against friend and foe alike.
That India could so meekly surrender in the face of threats and sanctions belies the country’s claims as a rising superpower something that India didn’t fall for even when it was a much poorer and weaker country than it is now. And yet the government has been selling what sounds like a complete reneging on long standing principles that India has staunchly stood by and attempting to suppress anyone who says otherwise.
The Government of India needs to explain why it needs to sign this deal, that is clearly a compromise of India’s terms when we could have very well used our inherent strengths to our advantage. India, one of the world’s largest importers of fossil fuel makes it one of the most sought after customers from oil producing countries across the world. This inherent strength could have been used as a crucial bargaining tool during the negotiations. Unfortunately, the very fact that the Indian government has had to expend so much energy explaining this deal simply indicates that the advantages of this deal aren’t really apparent -- that itself should tell you everything you need to know about exactly what India has compromised to get this deal over the line.
