12-June-2025 Daily Answer Writing

Introduction
The India–US trade relationship has been marked by growing strategic alignment but also persistent trade tensions. The upcoming limited trade agreement aims to address tariff and non-tariff barriers, laying the groundwork for a broader trade partnership.

Strategic Importance of the Deal

• Market Access: The agreement seeks to enhance access for Indian agricultural and pharmaceutical products to the US market and reduce tariffs on select American goods like almonds and motorcycles.

• Technology and Standards: It will foster mutual recognition of standards, especially in sectors like electronics and medical devices, which will facilitate smoother trade flows.

• Geopolitical Balance: Amidst global supply chain reconfigurations and the US-China trade tensions, India is emerging as a strategic economic partner for the US.

Challenges and Concerns

• Limited Scope: Being a “limited” agreement, it does not address broader issues like digital trade, intellectual property, and services, which are crucial for India.

• Regulatory Differences: Issues related to food safety standards and labor/environment norms could still hinder effective implementation.

• Domestic Resistance: Certain sectors in India, particularly dairy and agriculture, fear being undercut by cheaper US imports.

Way Forward
India should use this agreement as a stepping stone toward a comprehensive trade pact, focusing on domestic capacity-building, export diversification, and resolving technical barriers.

Conclusion
The limited trade agreement reflects a pragmatic start to a deeper economic partnership. While it may not be transformative on its own, it symbolizes renewed momentum in India–US trade ties and strategic convergence.