GTRI warned on 'Masala Deal' with America: India advised to stick to its interests in the deal; Know reasons

GTRI has described it as a 'MASALA deal', which means Mutually Agreed Settlements Achieved through Levelized Arm Twisting, that is, achieving mutual agreements by applying pressure. The report said that under these agreements, other countries usually have to cut tariffs without taking reciprocal concessions from the US, and guarantee the purchase of American goods. Also, Washington has to leave scope to impose additional tariffs in the future.

Due to limited success in implementing these conditions, the Trump administration has adopted punitive measures. On July 7, the US announced a 25 percent tariff on imports from Japan and South Korea. Just a few days later, on July 12, the US threatened to impose a 30 percent tariff on products imported from the European Union and Mexico, while negotiations with these countries are still going on.

The GTRI report urged India to understand that it is not the only country facing such pressure. The US is currently in trade talks with more than 20 countries and seeking concessions from more than 90 countries. However, most are opposed to it as they believe these masala deals are politically motivated and do not provide any lasting certainty in international trade.