The discussions for a US-India bilateral trade agreement have begun, with both countries aiming to dismantle trade barriers. USIBC highlights the agreement’s potential to boost GDP significantly. Concerns have been raised regarding the unpredictability of US trade demands, including extensive concessions from India, warranting caution in negotiations.
The India-US bilateral trade deal discussions have commenced between Commerce Minister Piyush Goyal and US Commerce Secretary Howard Lutnick, according to the US-India Business Council (USIBC). The USIBC emphasizes the need to eliminate non-tariff barriers and bureaucratic hurdles rapidly, as they impede market accessibility. USIBC President Atul Keshap remarked that establishing a meaningful trade relationship through this agreement is essential and would significantly enhance the GDP of both nations, offering comprehensive market access opportunities.
During their initial meeting in Washington, Goyal also plans to engage with the newly appointed United States Trade Representative Jamieson Greer before reciprocal tariffs are enacted on several countries, including India, next month. Prime Minister Narendra Modi and President Donald Trump previously agreed to initiate negotiations aimed at finalizing a mutually beneficial bilateral trade agreement (BTA) within seven to eight months, amidst an environment of potential reciprocal tariffs.
Keshap highlighted that US and Indian firms have been investing in each other without a formalized investment or trade framework, with India currently comprising merely 2.5 percent of America’s trade volumes— a figure that he believes should substantially increase. He urged both parties to focus on establishing a level playing field, facilitating open market access, expediting dispute resolution, and ensuring predictable taxation and regulatory guidelines to foster investment, economic growth, and job creation.
Despite the optimism surrounding the trade deal, caution is advised according to a Delhi-based think tank regarding a comprehensive Free Trade Agreement (FTA) with the US, given its historical oversight of prior negotiated trade arrangements. Citing the example of NAFTA, which was in effect since 1994 before being replaced with USMCA under President Trump—who subsequently imposed tariffs on member countries—the think tank emphasizes the unpredictability of US trade policies that often disregard previous agreements.
Moreover, there are concerns that during negotiations, the US may press India for additional concessions beyond mere tariff reductions, such as accessing government procurement processes, cutting agricultural subsidies, eroding patent protections, and allowing unrestricted data flows—demands that India has traditionally resisted. This underscores the need for prudence in negotiations as tensions over trade issues continue to rise.
The ongoing discussions between the US and India regarding a bilateral trade deal have the potential to significantly elevate the economic prospects of both nations. While there is optimism from business leaders about increased trade facilitation and market access, there remains a cautious approach due to the historical volatility of US trade policies. Close attention to negotiation terms will be crucial to prevent unfavorable concessions.
Original Source: www.business-standard.com
