New Delhi [India], February 8 (ANI): Union Commerce and Industry Minister Piyush Goyal on Sunday provided a clarification on the USD 500 billion figure mentioned in the India-US interim trade agreement, noting that India doesn’t have to but “intends to purchase” products worth that amount, noting that there was not any binding purchase obligation as per the framework.
In an interview with ANI, Goyal said the interim trade understanding does not require India to purchase specific quantities or values of goods from the US, adding that the estimates are based on India’s growing commercial needs.
“We don’t have to. We intend to procure certain equipment. I’ve talked about aircraft, aircraft engines and aircraft parts. Civil aviation requirements. Trade doesn’t deal with defence. Trade deals with commercial requirements,” Goyal said.
Addressing questions on whether India is obligated to import USD 100 billion worth of goods per year over the next five years, the minister said, “There is no such limitation.”
Goyal explained that India’s expanding economy will require significant imports in sectors where the US has strong capabilities, including energy, aviation, steel inputs and information and communication technology (ICT) products and pointed out that India’s coking coal requirement alone could rise from the current USD 17 billion to USD 30 to 35 billion annually as steel production capacity expands from 140 million tonnes to 300 million tonnes.
“We estimate that the requirements that we have for import of certain items where the United States has the ability to sell to us, things like crude oil, LNG, LPG, airplanes, their engines, their spare parts, and coking coal. We have 140 million tons of steel capacity. We’re going to increase that to 300 million tons. Our current coking coal requirement for steel is already USD 17 billion. That will probably be USD 30 billion. USD 30 to 35 billion a year will be required only for coking coal. If we have one or two more countries supplying that, the more the merrier. We get a better deal. We can negotiate smarter and better,” the Commerce Minister said.
Highlighting civil aviation needs, the Union Minister said India already has aircraft orders worth around USD 50 billion with Boeing, in addition to orders for engines and spare parts.
“I suspect we’ll need anywhere between USD 80 and 100 billion of just civil aviation-related products,” he said.
Goyal also noted that India’s energy imports continue to grow annually, while emerging sectors such as data centres, artificial intelligence and quantum computing will significantly increase demand for ICT products.
“We continue to buy a lot of energy needs from all over the world, and that grows every year, 8 to 10 per cent, 6 to 8 per cent. Now we will require large quantities. We are setting up data centres. We are developing the AI and quantum computing economy in a big way. All of these will require huge amounts of ICT products. When we estimate these products,” the Commerce Minister said.
“Currently, we are already importing USD 300 billion a year of these products from different parts of the world. In the next five years, we estimate we will need 2 trillion dollars of these products, and America has very good capabilities and capacity to support the Indian economy with high quality at competitive prices,” he added.
He stressed that India intends to purchase a substantial volume of these products based on competitive pricing and quality, but clarified that intent should not be confused with obligation.
“We hope they will offer us very competitive prices. We intend to purchase a good volume of these products out of our USD 2 trillion imports. But the intent is different,” the Minister said.
The clarification provided by Goyal followed scrutiny by opposition leaders over the USD 500 billion figure “intended” for the purchase of US products over the next five years under the new framework of the India-US interim trade agreement.
According to the Joint Statement, “India intends to purchase USD 500 billion of US energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal over the next five years. India and the United States will significantly increase trade in technology products, including Graphics Processing Units (GPUs) and other goods used in data centres, and expand joint technology cooperation.” (ANI)