US-India trade deal may repair commerce but not strategic rupture

Summary

• US and India reached a trade deal lowering tariffs: US reduces tariffs on Indian goods (50% to 18%), while India will reportedly reduce tariffs on US goods to zero from 17%.
• Experts note the deal is transactional, not strategic, and doesn't rebuild trust. There are doubts about India's commitment to stop buying Russian oil.
• The deal may help India against ASEAN competitors, give Delhi more room to manoeuvre in its dealings with Beijing, but might not be able to push Russia to end the war in Ukraine.

HOUSTON – Long in the making and low on detail, the newly-minted trade deal between the US and India promises commercial relief but no strategic stairway to heal the rupture in bilateral ties.

The deal will see the US lower tariffs from 50 per cent to 18 per cent
on made-in-India items like jewellery and textiles. This could add to India’s competitiveness in some sectors against the manufacturing and export powerhouses like China and Vietnam, which now face higher tariffs than India.