India should not rush to finalise US trade deal, says 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, calling for careful scrutiny before signing.
The comments noted that trade agreements, once locked in, remain in force for a long period, making it important to weigh terms carefully rather than move quickly.
Agriculture and dairy were flagged as politically and economically sensitive sectors requiring particular attention in the negotiations.
The remarks came amid ongoing India-US Bilateral Trade Agreement (BTA) negotiations, following an interim trade framework announced earlier in 2026 that reduced US tariffs on Indian exports.
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; its recommendations are advisory and not binding on the government.
Key Details
- Constituted in its current form on September 25, 2017, under the National Democratic Alliance government.
- Functions include analysing critical economic issues referred by the Prime Minister and addressing matters of macroeconomic importance.
- It has no statutory backing (unlike, say, the Finance Commission) — it exists purely to advise, distinguishing it from constitutional/statutory bodies tested elsewhere in Polity.
As an EAC-PM member, the individual's comments represent independent economic-advisory input into ongoing trade policy, illustrating how such bodies shape (without binding) trade negotiation strategy.
Bilateral Trade Agreement (BTA) vs. Interim Trade Deal
A Bilateral Trade Agreement (BTA) is a comprehensive trade pact between two countries covering tariffs, non-tariff barriers, services, and other trade-related commitments; it differs from an "interim" or "framework" trade deal, which addresses limited, immediate issues (typically tariff relief) pending a fuller agreement.
Key Details
- India and the US launched formal BTA negotiations in February 2025; an interim trade framework was announced in February 2026, reducing US tariffs on Indian exports from a higher rate to a lower rate as an initial step.
- A full BTA typically requires deeper commitments on market access, non-tariff barriers, and regulatory alignment — sectors like agriculture and dairy are traditionally the most sensitive due to domestic livelihood and food-security concerns.
- Unlike an FTA (Free Trade Agreement) which usually implies near-total tariff elimination on substantially all trade, a BTA can be narrower in scope and does not necessarily require elimination of tariffs on all goods.
The caution urged is specifically about converting the interim framework into a full, long-duration BTA — since such agreements "lock in" terms for an extended period, sensitive sectors like agriculture and dairy need thorough scrutiny before commitments are finalised.
Agriculture and Dairy in Indian Trade Negotiations
Agriculture and dairy are consistently treated as sensitive sectors in India's trade negotiations because of their direct link to farmer livelihoods, food security, and rural employment, alongside India's historically higher protective tariffs and subsidy structures in these sectors.
Key Details
- India has kept agriculture largely outside major concluded trade pacts (e.g., it did not join RCEP in 2019 partly over agriculture/dairy concerns) to protect small and marginal farmers.
- Dairy is especially sensitive because of import-competition concerns for India's cooperative-based dairy sector (e.g., under Operation Flood's legacy institutions).
- Trade negotiators typically use "sensitive lists" or exclusions to shield such sectors from full tariff liberalisation even within broader trade pacts.
The specific sectors flagged as needing "particular attention" in the India-US negotiations are agriculture and dairy — precisely the sectors India has historically protected in past trade negotiations.
- India-US Bilateral Trade Agreement (BTA) negotiations were formally launched in February 2025.
- An interim trade framework was announced in February 2026, easing US tariffs on Indian exports as an initial step ahead of a full BTA.
- The EAC-PM was reconstituted on September 25, 2017; it is an advisory, non-statutory body reporting to the Prime Minister.
- Agriculture and dairy have been identified as the most sensitive sectors in the ongoing negotiations.