America Ever since Donald Trump has taken over, there is an atmosphere of upheaval all over the world. India is also not untouched. Trump is accusing India of charging a thick fee on American equities. Meanwhile, Trump on Friday made a big claim that India had agreed to reduce the tariff. On the other hand, Commerce and Industry Minister Piyush Goyal returned from Washington on Saturday after holding a business talks with his American counterparts. Goyal interacted with the US Trade Representative (USTR) Zamison Greer and US Commerce Minister Howard Lutnik during his week -long visit. Lutnik has also advocated a comprehensive and grand trade agreement with India. After all, what is this broad and grand trade agreement, on which the US is pressurizing to talk about it? Let us try to understand this in question-answer (QA) format.
Question- What is a big and grand bilateral trade agreement?
Answer- Typically, two business partners in a trade agreement either eliminate or reduce the customs duty on maximum goods to be traded among themselves. The US wants to interact on a comprehensive trade agreement, instead of involving all major aspects instead of being involved in region-specific discussions. In addition to the fee cuts, the US may want to include provisions on government procurement, agricultural subsidy, relaxation in patent law and unrestricted data flow. These are issues that India have opposed in a big way.
Question – Why does America want India to open its agriculture sector?
Answer – Agriculture in India is not just an economic activity, but it is a way to live life, which provides employment to more than 70 million people. India is largely self -sufficient in food production, while agriculture is a major trade industry for the US. According to a report, US agricultural exports in 2024 were $ 176 billion, which was about 10 percent of its total trade exports. With large -scale mechanized farming and heavy government subsidies, the US and other developed countries see as an attractive market to expand their exports to India. Unlike India, where farming is associated with livelihood, America considers agriculture primarily to be the issue of trade and market access.
Question- What does it mean to open an area for another country?
Answer- India’s agricultural sector is currently protected by moderate to high fees to protect domestic farmers from unfair competition. Opening an area means to reduce import restrictions and duty.
Question – Why is the agriculture sector sensitive in India?
Answer- Aligned activities like agriculture and animal husbandry are the backbone of India’s rural economy, which provide employment to more than 70 million people. Unlike developed economies, where agriculture is highly mechanized and corporate, it is an issue of livelihood in India, making any move to liberate the region highly sensitive.
Question- Why is agriculture a politically sensitive issue for the Government of India?
Answer- According to Ajay Srivastava, founder of Economic Research Institute GTRI, opening agriculture for heavy subsidized foreign imports will mean the flow of cheap food products, which will have a serious impact on the income and livelihood of Indian farmers. He said, “More than 90 percent of the global food trade is controlled by five multinational corporations, which historically used hunter pricing strategies. If India reduces protection, domestic farmers may depend on the mercy of these global giants, which can lead to serious political and economic consequences. This makes agriculture a controversial issue for the Indian government. ”
Question- What kind of duty does India impose agricultural imports?
Answer- India maintains a fee structure from minus to 150 percent to protect its agricultural sector. The US also imposes high fees on select agricultural products. For example, the US imposes a 350 percent fee on tobacco.
Latest business news