How the U.S. and India Finally Reached a Deal
Welcome to Foreign Policy’s South Asia Brief.
The highlights this week: The United States and India finalize a trade deal after many rounds of negotiations, violence rocks the Pakistani province of Balochistan, and India’s new budget emphasizes infrastructure and manufacturing.
Welcome to Foreign Policy’s South Asia Brief.
The highlights this week: The United States and India finalize a trade deal after many rounds of negotiations, violence rocks the Pakistani province of Balochistan, and India’s new budget emphasizes infrastructure and manufacturing.
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The U.S.-India trade deal announced on Monday by U.S. President Donald Trump delivers a major boost to a floundering relationship. The agreement is a major boon for India’s economy, with tariffs on products to one of its biggest export markets falling from 50 to 18 percent.
One of the big questions about the deal, which followed many rounds of negotiations, is why it took so long. India had long declined more access to politically sensitive sectors, especially agriculture—a position that contributed to failed talks.
U.S. Commerce Secretary Howard Lutnick has said Indian Prime Minister Narendra Modi’s unwillingness to call Trump last summer prevented a deal from being finalized. (India has disputed this claim.) One can’t discount the possibility that Trump’s pique at New Delhi for failing to give him credit for his role in an India-Pakistan cease-fire got in the way, too.
However, the decisions that Trump says enabled the deal to be clinched—India pulling back from Russian oil imports and promising to buy more U.S. oil—were made long ago. India ramped up Russian crude imports after the full-scale invasion of Ukraine, but it reduced those purchases after the United States implemented new sanctions on Russia last November.
Furthermore, India’s oil imports........
