The devil's in the details of the U.S.-India trade deal
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What trade deal did President Trump announce with India?
America agrees a trade deal with India, but the devil may be in the detail. Live from the UK, this is the Marketplace Morning Report from the BBC World Service. Hello, I'm Nick Koreshi. Has Donald Trump really pulled off another of his much-touted trade agreements? The US President announced that America would cut tariffs on goods imported from India and said in return India had promised not to buy any more Russian oil. Trouble is, when Prime Minister Narendra Modi announced the tariff reduction, he did not mention anything about Russia or its oil. Here's the BBC's Asia business correspondent, Ashna Shukla. Hi, Ashna. Hi, Nick. Give us some details then about this trade deal.
Well, the details are still a bit sketchy, but what's clear for now is that U.S. will lower tariffs on Indian goods from 50 percent to 18 percent.
What are the implications of India's tariff reduction on U.S. goods?
And that is a big deal because U.S. is India's largest trading partner. More than a third of what India exports goes there. So for export driven sectors like textiles, gems and jewelry, seafood and auto components, It is a major relief. Many of the exporters that we've been speaking to over the last several months, they said nearly 30 to 50 percent of their business had collapsed. So for them, it's a major relief. But apart from that, the fine print of the deal is really missing. While President Trump says India will stop buying Russian oil, that India will also cut tariff on American goods to zero. None of this is actually confirmed by New Delhi.
Could there be a reason, Archana, why Narendra Modi would promise President Trump various things but not want to make that public?
If we talk about the Russian oil purchases, India and Russia are long-term allies. And it's unlikely that India will completely cut down its Russian oil purchases.
Why didn't Modi mention Russian oil in the trade deal announcement?
One, because it's also cheap. And secondly, because of the long-standing relations. And even from the geopolitical lens, Beijing, Delhi, Moscow, they've literally deepened their ties after the sweeping tariffs came into effect. So from that perspective, it seems unlikely that such sort of major deal has been struck where India would say they would cut Russian oil supplies completely or bringing it down to zero tariffs as far as agriculture and dairy is concerned, which are really very politically sensitive sectors in India. And hence, many experts who are looking at some of the sketchy details that are still emerging say, They feel that right now what we should position this as just political signals, a truce coming through, but not really a full trade deal in picture.
Archana Shukla, thanks for joining us on Marketplace.
Thank you, Nick.
That takes us to the numbers. And stock markets are reacting well to that deal. India's Nifty 50 trading up 2.7%. And after a big fall in the price of gold and silver on Friday and Monday, support for precious metals has returned this morning in early trading. On Tuesday, the value of gold jumped by over 6%, its biggest daily rise since November 2008. To Venezuela next, where last week a law was passed opening the country's oil industry to foreign investment. This was a key White House demand following military action last month. The BBC's Norberto Paredes is the first international journalist to report from the country's decaying oil heartland since the removal of President Nicolas Maduro, where people are hoping the industry's revival will once again bring jobs and prosperity.
Maracaibo is the oil heartland of the country with the largest pullman reserves in the world This city is not what it used to be. The colonial-style buildings, brightly painted in tropical colors, have faded and cracked. The streets are full of potholes and very quiet. Maracaibo used to be the wealthy heart of Venezuela's old boom, but decades of mismanagement have hit it hard. Now it feels like a symbol of a country that has declined. People here are desperate for the political stability and the investment to bring Maracaibo back to life. Getting ready for a trip out on the city's lake, these fishermen are being hit by both the economic downturn and the pollution caused by the decaying oil industry.
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Chapters
4 chapters
1
What trade deal did President Trump announce with India?
0:01–0:49
2
What are the implications of India's tariff reduction on U.S. goods?
0:49–1:42
3
Why didn't Modi mention Russian oil in the trade deal announcement?
1:42–7:01
4
How might India's relationship with Russia affect the trade deal?
7:01–7:34