MUMBAI – Indian exporters yesterday hailed Donald Trump’s announcement of a US-India trade deal and a pledge to slash tariffs on the nation’s goods that brings an end to months of uncertainty, but analysts urged caution citing a lack of clarity. The US president said that the agreement came together after prime minister Narendra Modi promised to stop buying Russian oil over the war in Ukraine, adding that he would lower levies to 18% from the 25% imposed last year.

He also said New Delhi had agreed to purchase more than US$500 billion worth of US energy, technology, agricultural, coal and other goods. An extra 25% toll imposed over India’s Russian oil purchases was also removed, a White House official told AFP.

While Washington had struck deals with most governments since he unveiled sweeping tariffs in April last year, Indian officials had struggled to follow suit.

The lack of a pact had rattled investors for much of last year and prompted foreign funds to pull more than US$20 billion from Indian markets, while hammering the rupee.

But the president’s announcement late Monday was welcomed by markets, with Mumbai’s benchmark Nifty index jumping nearly five percent at the open.
The federation of Indian export organisations called the agreement the “father of all deals,” adding that several sectors would see a “rapid surge in orders.”
“It is extremely good news,” FIEO director general Ajay Sahai told AFP, “Indian exporters will now be equally competitive compared to southeast Asian and south Asian rivals. If you look at a lot of our rivals in the region, it is mostly above 19%.”

Sahai said apparel and footwear manufacturers, who had seen orders delayed because of the high US duties, would feel immediate relief.
“Normally orders for the upcoming (summer) season are finalised by December. But a number of orders were put on hold due to the tariffs. Now that will start moving back to India,” he said. Despite resilient shipments of smartphones and generic drugs which were exempted from the original tolls – labour-intensive sectors such as marine products and gems and jewellery had been hit hard.  – Nampa/AFP