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'Stronger economic partnership': TAG members on 'huge' India-US trade deal
The India-US trade deal was announced on Monday after nearly a year of tense negotiations that strained the bilateral ties between New Delhi and Washington.
US President Donald Trump and Prime Minister Narendra Modi announced a trade deal after a phone call on Monday, with tariffs on Indian goods being lowered to 18 per cent and the Republic leader claiming that New Delhi would 'stop' purchasing Russian oil.
The breakthrough comes after nearly a year of tense negotiations that strained the bilateral ties between New Delhi and Washington, with higher tariffs imposed on India, along with a penalty over Russian oil purchases.
Members of The Asia Group (ASIA), including co-founder and chairman Kurt Campbell, reacted to the trade deal, saying that it would pave the way for a "stronger economic partnership".
Campbell said that the India-US trade deal is a "welcome but overdue signal that both sides now seek to restore a more positive trajectory" to their bilateral ties after months of "damaging setbacks in what was seen as a defining partnership for the 21st century".
"Even though there are clear indications of market opening steps - particularly for US firms seeking to operate in the rising Indian commercial sector - the deal takes a back seat to the blockbuster Europe-India accord announced last week. The Washington-Delhi deal will help restore a degree of normalcy to bilateral relations, but re-establishing strategic momentum between the leadership remains challenging," Campbell added.
Basant Sanghera, a managing principal at TAG, said that the trade agreement marks a milestone moment in the eight-decade-long India-US diplomatic ties.
"While the legal text of the agreement is still being finalised, the deal is anticipated to provide notable tariff relief for New Delhi and represents a key achievement for the Trump administration's trade diplomacy. Coming almost exactly a year after Prime Minister Modi’s visit to Washington, the deal will also inject much-needed momentum in the wider bilateral partnership after months of headwinds," he said.
Sanghera further stated that India's patience has "paid off, for now," but added that New Delhi will need to actively work on the relationship to ensure that the trade saga does not flare up again.
Mark Linscott, a senior advisor with TAG, noted how the economic side of India-US bilateral ties will fall back on track after a roller coaster ride in the past months.
"This is a huge deal for both countries, particularly less than a week after India’s “mother of all” trade agreements with the European Union. It’s been a roller coaster ride in recent months, and the bilateral relationship has taken some hits. But this announcement should put the economic side back on track and start to pave the way for a comprehensive bilateral trade agreement, as the two leaders pledges almost a year ago," he said.
Meanwhile, Aman Raj Khanna, a partner at The Asia Group, said that the trade agreement "comes at a critical moment and goes a long way in restoring positive momentum to what I still believe will be the most consequential partnership of the 21st century".
He added that the timely resolution provides the much-needed relief to exporters on both sides, who Khanna said have "weathered significant uncertainty in the intervening months".
The trade agreement also "creates the foundation for renewed trust-building and cooperation across the sectors that will define the coming decades: the AI stack from infrastructure to compute, defense, cybersecurity, and emerging technologies," Khanna added.
Nisha Biswal, a Partner at TAG, said that the trade deal will pave the way for a "much bigger economic partnership between our two countries".
"While this is still a phase 1 agreement, it creates the pathway for negotiations on a more comprehensive agreement, akin to the EU-India agreement announced last week. The two deals combined will transform India’s global trade and economy," she added.
Ashok Malik, a partner and Chair of India Practice at TAG, stated that the India-US trade deal will provide reassurance to business stakeholders on both sides.
"It will pave the way for a stronger economic partnership, particularly in strategic sector manufacturing and in the technology and digital domain. The extraordinary complementarities of the India-US economic relationship can now be optimally realised," he added.
What Trump and PM Modi said about trade deal
Trump first announced the deal in a post on Truth Social, saying that the US's relationship with India will be even stronger going forward. He said that it was an "honour" to speak with PM Modi, who he said is one of his "greatest friends" and a "powerful and respected leader" of India.
The US President claimed that India agreed to stop buying Russian oil and would instead purchase more from the US and potentially Venezuela.
“Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%. They will likewise move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO,” Trump wrote.
He further stated, "The Prime Minister also committed to "BUY AMERICAN", at a much higher level, in addition to over $500 BILLION DOLLARS OF U.S. Energy, Technology, Agriculture, Coal, and many other products. Our amazing relationship with India will be even stronger going forward. Prime Minister Modi and I are two people that GET THINGS DONE, something that cannot be said for most."
Meanwhile, PM Modi said that Indian products will now face a reduced tariff of 18 per cent, extending a "big thanks" to Trump on behalf of the entire nation.
He said that when two large economies like India and the US work together, it benefits the countries' people and presents a sea of opportunities for both sides.
"Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18%. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement. When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation," he said in a post on X.
PM Modi further wrote, "President Trump’s leadership is vital for global peace, stability, and prosperity. India fully supports his efforts for peace. I look forward to working closely with him to take our partnership to unprecedented heights."
