US Revises Trade Deal Factsheet with India, Softening Key Claims
The United States has made significant revisions to an official factsheet detailing the recent trade agreement with India, tempering earlier assertions about the gains secured from New Delhi. The updated document, released on Wednesday, modifies critical sections that had sparked backlash from Indian opposition parties and farmer groups, reflecting a more nuanced portrayal of the deal's commitments.
Key Changes in the Revised Factsheet
The White House revised the factsheet originally published on February 9, altering language in several areas. Notably, the section on digital services taxes has been entirely removed. Previously, it stated that India would eliminate its digital services taxes and negotiate bilateral digital trade rules, including prohibitions on customs duties for electronic transmissions. This deletion comes amid concerns that India might be agreeing to refrain from imposing equalisation levy-style taxes on American tech companies in the future, despite India having removed such taxes last year.
In another major adjustment, the factsheet changed the wording regarding India's purchase of American goods. The earlier version claimed India had "committed to" buying over $500 billion worth of U.S. products, including energy, technology, coal, and other items. The updated version replaces "committed" with "intends," softening the obligation. Government officials have clarified that this figure is not legally binding, as private companies, not sovereign governments, are involved in placing orders.
Additionally, the mention of "certain pulses" among agricultural products India would reduce tariffs on has been dropped. This revision aligns the factsheet with the joint statement announced on February 6, which made no reference to pulses. Market access to agriculture remains a sensitive issue in India, with farmer groups expressing worries about potential surges in imports affecting local markets.
Implications and Domestic Reactions
The revisions have significant implications for both countries. The removal of the digital services taxes section addresses fears about India ceding data sovereignty under trade pacts. Experts warn that the U.S. has been pushing partners to accept conditions restricting data localisation regulations, which mandate storing data within national borders. India's stance on maintaining control over such policies is crucial for its digital economy.
On the agricultural front, the changes have not fully alleviated concerns among Indian farmers. The Samyukta Kisan Morcha, representing various farmer groups, announced a nationwide general strike following the trade deal announcement, citing secrecy in negotiations and potential market disruptions. Some farmers fear that access for products like dried distillers' grains (DDGs) could introduce genetically modified items into India and allow U.S. corporations to monopolize the animal feed market.
Despite these revisions, the trade deal outlines that India is expected to purchase approximately $100 billion worth of American products annually over five years, covering areas such as aircraft, technology, precious metals, oil, nuclear products, and agricultural goods. India's exports to the U.S. in FY25 stood at $86.51 billion, highlighting the bilateral trade dynamics.
Broader Context and Historical Precedents
This softening of language is not unprecedented in international trade agreements. For instance, the India-European Free Trade Association (EFTA) deal included commitments for $100 billion in investments over 15 years, using similar non-binding phrasing. The revisions in the U.S. factsheet may reflect diplomatic adjustments to mitigate domestic political pressures in India, where trade deals often face scrutiny over sovereignty and economic impacts.
As both nations navigate this agreement, the revised factsheet underscores the complexities of trade negotiations, balancing economic interests with political sensitivities. Further developments will be closely watched by stakeholders in agriculture, technology, and policy sectors.
