'India should not rush into US trade deal, must protect national interests': EAC-PM Member Sanjeev Sanyal
A member of the Economic Advisory Council to the Prime Minister (EAC-PM) said India should not rush to finalise its trade agreement with the United States and must ensure long-term national interests are protected before signing.
Substantial progress was noted in the ongoing India-US trade negotiations, though further discussion rounds may still be needed given the agreement's expected long duration.
Agriculture and dairy were flagged as sensitive areas requiring careful handling, given the potential for domestic political and economic sensitivity in producer states.
Policy stability and predictability from the US side were identified as necessary conditions for smoother trade relations going forward.
Economic Advisory Council to the Prime Minister (EAC-PM)
The EAC-PM is a non-constitutional, non-permanent, independent body that provides economic advice to the Prime Minister of India, distinct from statutory bodies like the Finance Commission or NITI Aayog.
Key Details
- Currently structured with a Chairman, three full-time members, and eleven part-time members.
- It has no legal/constitutional backing — it is an advisory body reconstituted at the Prime Minister's discretion, unlike the Finance Commission (Article 280) or the Union Public Service Commission (Article 315), which are constitutional bodies.
- Its recommendations are advisory only and not binding on the government, distinguishing it from statutory regulatory bodies like SEBI or RBI.
As an EAC-PM member (not a government minister or negotiator), the commentator's caution on trade timing reflects an independent economic-advisory viewpoint feeding into government thinking, rather than an official negotiating position — a distinction relevant to understanding how India's economic policy advice ecosystem is structured.
India-US Interim Trade Agreement (2026) — Structure and Sensitive Sectors
India and the US concluded an interim trade agreement earlier in 2026 that reduced tariffs on Indian exports, while carving out protections for politically sensitive agricultural sectors, ahead of a more comprehensive Bilateral Trade Agreement (BTA).
Key Details
- The interim deal cut tariffs on Indian goods to around 18%, down from escalated levels that had reached roughly 50% during the tariff dispute.
- Sensitive products — dairy, rice, millets, cereals, meat, pulses, oilseeds, and ethanol — were kept on a protected/negative list with no or minimal tariff concessions, while India offered limited access on items like distillers' grains, red sorghum (animal feed), and soyabean oil.
- Indian exports such as spices, tea, coffee, cashew, and select fruits received zero-duty access to the US market under the interim deal.
- A full-fledged Bilateral Trade Agreement (BTA) — a more comprehensive, legally deeper pact than an "interim" agreement — is targeted for conclusion by late 2026 or 2027.
The EAC-PM member's caution about agriculture and dairy directly maps onto the interim deal's already-negotiated negative list — signalling that the next, deeper phase of negotiations (the full BTA) is where the toughest trade-offs on these politically sensitive sectors will need to be finalised.
Distinguishing Trade Agreement Types: Interim Deal vs. Comprehensive FTA/BTA
UPSC frequently tests the legal and scope distinctions between different categories of trade agreements that countries use as negotiating stages.
Key Details
- An "interim" or "early harvest" agreement covers a limited set of tariff lines/sectors, is faster to negotiate, and is typically a bridge toward a more comprehensive agreement.
- A comprehensive FTA/BTA covers a much wider range of goods, services, investment, IP, and regulatory cooperation, and is more binding and detailed (comparable in structure to India's CECA with Singapore, 2005, or the India-UAE CEPA, 2022).
- India's recently concluded agreements with European countries — the EFTA agreement and the UK FTA — are already in force, while the India-EU FTA (signed January 27, 2026) is expected to come into force by end-2026, providing a comparative benchmark for how India sequences interim vs. comprehensive deals with different partners.
The call to "not rush" reflects the general principle that a comprehensive BTA, unlike a narrower interim deal, is a long-duration commitment — the article notes the agreement "would remain in force for a long period" — making the sensitivity of unresolved sectors like dairy far higher at the comprehensive-agreement stage.
- India-US interim trade deal tariff on Indian exports: reduced to approximately 18% (from an escalated peak of around 50%)
- Sensitive sectors on India's protected/negative list: dairy, rice, millets, cereals, meat, pulses, oilseeds, ethanol, tobacco
- US share of India's total exports: roughly one-fifth (about 20%); around a third of India's labour-intensive exports (e.g., textiles, garments)
- India-EU FTA signed: January 27, 2026; expected to enter into force by end-2026
- India-EFTA and India-UK FTAs: already in force as of mid-2026
- EAC-PM current composition: 1 Chairman + 3 full-time members + 11 part-time members