The Prime Minister’s Economic Advisory Council (EAC-PM) President S Mahendra Dev said on Thursday that India should talk about the trade agreement with the US on the basis of its terms and national interests. According to PTI news, Dev hoped that in future when India will make a free trade agreement (FTA) with various countries, the tariff gain will lead to increasing exports to India. He said that India’s overall policy has been to decide the business agreements prioritizing national interests and on its own terms. The conversation continues, and the final decision will depend on the mutual interests of the two countries.
America wants a deal like Indonesia from India
US President Donald Trump has indicated that the United States wants to signed the same trade agreement with India that it has recently done with Indonesia. Under this deal, Indonesia has promised to open a full market for US products, while Indonesian products will be charged up to 19% in the US. In addition, Indonesia has promised US $ 15 billion energy, $ 4.5 billion agricultural products, and purchase of 50 Boeing aircraft.
India rejected these demands of America
The fifth round of bilateral trade talks between India and the US are going on in Washington. India has strictly rejected the US demands, including fees concessions on dairy and agricultural products. So far, India has not given a fee exemption in the dairy sector under any free trade agreement. Instead, India has sought relief from the US for 50% fee on steel and aluminum and 25% tax on auto sector. Also, India has reserved the right to impose a fee under the World Trade Organization Rules.
What did inflation say on target and financial discipline
The EAC-PM president said that there is no need to increase inflation target at the moment, as the current structure is handling both inflation and development. He said that under the inflation targeting framework, the last 10 years of experience suggests that inflation remained within 2% -6%, and this provided relief to the poor and middle class. Currently, RBI’s inflation target is 4%, which has a limit of +/- 2%. Dev suggested that the data will be better after the new base year 2024 of the consumer price index in the future.
He said that India has made tremendous progress in the case of mobile phones. FY15 imported 78% of mobile phones, while by FY23 it declined to only 4%. Similarly, FDI has also increased significantly in electronics and renewable energy sectors. Dev applauded that the government has reduced the fiscal deficit of 9.2% in FY21 to 4.8% in FY25, and has targeted to bring it to 4.4% for FY26.
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