00:00Well, our next guest served at the U.S. State Department for 12 years, working on engagement
00:04with India and coordinating key parts of the annual 2 plus 2 dialogue between the nations.
00:10Let's get to Basant Sanghara, Managing Principal at the Asia Group.
00:14Basant, thanks so much for your time today.
00:16I mean, we don't have a full text of what was agreed to, but can you give us your initial
00:21reaction to this news?
00:23Sure.
00:23Thank you for having me, Paul.
00:24A real milestone moment in nearly eight decades of U.S.-India diplomatic ties.
00:30I think the bulk of what was negotiated in the bilateral trade agreement actually took
00:34place last year.
00:35There was a moment in July when both sides were very close to announcement for a number
00:41of reasons, geopolitical India, Pakistan, Russian oil.
00:44That agreement wasn't announced then, but both sides have managed to revive a lot of
00:49that work.
00:50I think in key sectors, industrial goods, spirits, not all agricultural goods, but some
00:58items, you'll see wide relief for U.S. exporters.
01:04The timelines, I think, still need to be sorted out.
01:06The legal text, important to remember that this is a legally binding text.
01:10That process to finalize, that text is still ongoing.
01:15And of course, a huge relief for Indian exporters to the United States after facing that heavy
01:2150 percent penalty tariff, which will now go down to 18 percent.
01:26Well, the U.S. would still like India to further lower trade barriers.
01:30But how realistic is that?
01:32Because agriculture is off limits.
01:34New Zealand and the European Union couldn't agree access for dairy products.
01:39So why would the U.S. expect any different treatment?
01:42Well, I think it's important to remember that of the deals India has concluded with various
01:49partners, including a very monumental EU one, from our understanding is what it's offered
01:54from to the U.S. has been unprecedented and competitive compared to what is offered other
02:01partners.
02:02Certain sectors, as you mentioned, particularly dairy, GMOs, those were non-starters.
02:08And I don't think those will feature in this agreement.
02:13It's also important to remember that this is the phase one portion of this agreement is
02:19just going to cover reciprocal tariffs and non-tariff barriers, such as quality control
02:24orders.
02:24There are going to be subsequent chapters.
02:27Total is 19 dealing with things like digital trade, intellectual property, and most importantly,
02:33economic security.
02:34As you probably are tracking, the Indian foreign minister is going to be in Washington this
02:40week for an important meeting on critical minerals, how both sides can cooperate more
02:46on economic security matters, including critical minerals.
02:50That's going to be an important part of the follow-on agreement.
02:53So again, this is just the first phase, an important one.
02:57But the negotiations on those subsequent chapters, they will continue throughout the remainder
03:02of the year.
Comments