$700 bn total imports, $500 bn from US alone?: Tharoor on trade deal
The recent trade deal between India and the United States has sparked a heated debate, with many questioning the feasibility of the claims made by US President Donald Trump. During the announcement of the trade deal, Trump stated that Prime Minister Narendra Modi had committed to buying “$500 billion worth of US energy, technology, agricultural, coal, and many other products”. This statement has raised eyebrows, with many experts and politicians seeking clarification on the matter.
Congress MP Shashi Tharoor was one of the first to raise questions about the validity of Trump’s claim. Tharoor tweeted, “Our entire import bill is $700 billion, so are we going to stop buying from every other country?” This statement highlights the concerns surrounding the trade deal, with many wondering how India can afford to allocate such a significant portion of its import budget to the United States alone.
To put this into perspective, India’s total import bill for the year 2020-21 was approximately $700 billion. This includes imports from all countries, including China, the European Union, and other major trading partners. If India were to allocate $500 billion to the United States, it would mean that nearly 70% of its total import budget would be dedicated to US products. This raises questions about the impact on India’s trade relationships with other countries and the potential consequences for the domestic economy.
Tharoor’s statement also highlights the issue of trade diversification. India has been actively seeking to diversify its trade relationships in recent years, with a focus on reducing its dependence on any one country or region. The idea of allocating such a large portion of its import budget to the United States alone seems to go against this strategy, and could potentially undermine India’s efforts to promote trade with other countries.
Furthermore, there are concerns about the potential impact on India’s domestic industries. If India were to import $500 billion worth of goods from the United States, it could lead to a significant increase in imports, potentially hurting domestic manufacturers. This could be particularly damaging for industries such as textiles, pharmaceuticals, and electronics, which are already struggling to compete with cheap imports from countries like China.
Another issue that has been raised is the question of whether India has the capacity to absorb such a large amount of imports from the United States. India’s economy is still recovering from the COVID-19 pandemic, and there are concerns about the country’s ability to pay for such a large amount of imports. Additionally, there are questions about the impact on India’s trade deficit, which could potentially widen if the country imports more goods than it exports.
In response to these concerns, the government has sought to clarify the details of the trade deal. Officials have stated that the $500 billion figure mentioned by Trump is not a firm commitment, but rather a target for increasing trade between the two countries. However, this clarification has done little to alleviate the concerns surrounding the deal, with many still questioning the feasibility of such a large increase in imports from the United States.
In conclusion, the trade deal between India and the United States has raised more questions than answers. While the idea of increasing trade between the two countries is welcome, the claims made by Trump have sparked concerns about the feasibility and potential consequences of such a deal. As Tharoor pointed out, India’s entire import bill is $700 billion, and allocating $500 billion to the United States alone seems unrealistic. The government needs to provide more clarity on the details of the deal and address the concerns surrounding its potential impact on India’s trade relationships and domestic economy.
News source: https://x.com/ANI/status/2018584610888937726
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