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Goldman Sachs raises GDP growth forecast for India by 20 bps after US lowers tariffs
Goldman Sachs raises GDP growth forecast for India by 20 bps after US lowers tariffs
How will one describe the India-US trade deal, an outcome of patience and restraint exercised by New Delhi, now that the Free Trade Agreement (FTA) between India and the European Union (EU) has already been termed as the ”mother of all deals”?
Though its details are still not available, the Indo-US deal has been reached after a year of negotiations during which hard bargaining was done by both sides. ‘'Quite often we were close to the deal but at times it did appear that we are far away from concluding it…of course, there is always give and take in any deal of this nature,'' an official said, without disclosing anything further.
Until a few weeks back, there were no indications that India and the US were about to close the deal despite a recent positive statement on the pact by US President Donald Trump, given his unpredictable character.
But what worked in India's favour was concluding the FTA with the 27-nation EU last week. Also, the arrival in New Delhi last month of President Trump's close aide Sergio Gor as Ambassador to India helped the two countries quietly fast track the negotiations.
It goes to the credit of the political leadership and the bureaucracy in India that it never lost patience and was quite guarded in its reaction to any offensive statement coming from President Trump or other top functionaries in Washington.
Prime Minister Narendra Modi, it is learnt, had told his top ministers and bureaucrats to be careful with their words and not to react to every statement emanating from Washington, even as his own personal relationship with President Trump was going through a troubled phase. External Affairs Minister S Jaishankar and Commerce Minister Piyush Goyal were quite guarded in their response to the hurdles in the way of concluding the trade pact with Washington, even as they conducted quiet diplomacy with their American interlocutors.
President Trump continued to show aggression and hostility towards India, first increasing the tariff on Indian products and then slapping a 25 per cent punitive tariff on this country on the charge that India was funding the ‘'Russian war machine'' in the war in Ukraine. Though his repeated claim that he brokered a ceasefire between India and Pakistan in May last year was strongly refuted by New Delhi. However, it refused to join the debate with President Trump on this issue.
Even as the talks with the US dragged on amid global uncertainties over President Trump's tariff regime, New Delhi accelerated trade engagements with other key allies, including the EU. It signed as many as five trade agreements to deepen economic partnerships, which strengthened its position on the negotiating table with the US.
In recent days, Indian officials clearly stated that New Delhi was in no hurry to conclude the deal with the US and that there was no question of sacrificing national interests, especially on agricultural products.
In his social media post on ”Truth Social” last night after talking to PM Modi, President Trump said the US will reduce tariffs on Indian imports from 25 per cent to 18 per cent. Though he did not talk about the 25 per cent punitive tariff that he had imposed on India, the US envoy later clarified that this duty is also being rescinded.
President Trump's claims that India will reduce its tariff and non-tariff barriers against the US to zero and ‘'Buy American'' at a much higher level are yet to be confirmed by New Delhi. An official word from India is also awaited on his claim that India will stop buying oil from Russia and buy much more from the US and potentially Venezuela.
With the trade deal done and dusted, India, in all probability, will join President Trump's “Board of Peace” that will work towards bringing lasting peace to Gaza. Other key Indo-US engagements, including the Quad Summit to be hosted by India, are also likely to be back on track.
Source: Msn.com
Source: OfficeNewz
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