(. SPECIAL)
SHREY MADAAN
New Delhi, Feb 27 (.) India’s new trade deal with the United States will be celebrated as a diplomatic win. But trade agreements are not trophies. They are tests. And this one will be judged on a simple question: does it make Indian markets more open, more competitive, and more affordable for ordinary people?
If not, it is just paperwork. At its core, the agreement brings down tariffs and opens markets on both sides. India will cut duties on American industrial and agricultural goods, while the United States lowers tariffs on Indian products. While it may appear technical, the outcome is clear, competition increases, protectionism recedes, and consumers benefit from better prices and greater choice.
For decades, many sectors have operated behind steep tariff walls. Import duties on automobiles, for example, have often exceeded 100 per cent. The result has been predictable, higher prices, weaker innovation, and fewer choices than consumers would see in open, competitive markets. Protection kept competitors out, but it also kept progress out.
Trade agreements disrupt that comfort zone. They expose protected industries to better products, sharper competition, and more demanding consumers. That pressure is not a problem. That is the point. India has seen this before. When the telecom sector opened to competition, call rates collapsed, and data became among the cheapest in the world. Hundreds of millions gained access to affordable connectivity. That transformation was not driven by protection or subsidies. It was driven by competition. Trade liberalisation works the same way.
Trade works best when markets, not ministries, determine outcomes. Countries operating on government mandated purchase targets distort competition and inflate prices, while lower tariffs and clear, simple rules allow businesses and consumers to respond to genuine demand. That is how trade creates lasting gains.
The same logic applies to agriculture and industrial goods under this deal. Lower tariffs on items like nuts, fruits, or industrial inputs will increase competition at home. Some producers will feel the pressure. But that pressure usually leads to better quality, greater efficiency, and stronger export competitiveness over time. Protection preserves firms. Competition improves them.
What ultimately matters is not the size of the purchase pledges or the symbolism of the agreement. It is whether the deal makes India’s markets more open and dynamic. If tariff cuts lead to lower prices, better products, and more innovation, the agreement will deliver real value. If it becomes a system of managed trade and selective concessions, its benefits will be limited.
Trade agreements are not about press releases or podium statements. They are about what changes in the marketplace. This deal will prove its worth only if it opens markets at home, expands competition, and lets people, not governments, decide what success looks like.
(The writer is Indian Policy Associate, Consumer Choice Center. The views are personal)
. XC RSA