The US-India Business Council urges swift action on dismantling non-tariff barriers as trade negotiations proceed. The deal, long overdue, aims to boost GDP for both India and the US through a formal trade framework. Analysts caution India against excessive concessions while negotiating, highlighting potential pitfalls based on historical agreements like NAFTA.
The India-US trade deal is essential for both nations as commerce minister Piyush Goyal and his US counterpart Howard Lutnick engage in discussions aimed at establishing an early bilateral agreement. The US-India Business Council (USIBC) emphasizes that dismantling non-tariff barriers will facilitate market access, which is currently inhibited by excessive regulation. USIBC President Atul Keshap stated that a bilateral trade agreement has been overdue and could significantly enhance the GDP of both countries while providing comprehensive market access.
Goyal and Lutnick held their inaugural meeting in Washington. Additionally, Goyal is scheduled to meet with Jamieson Greer, the newly-appointed United States Trade Representative (USTR), before reciprocal tariffs on countries, including India, come into effect next month. A prior agreement between Prime Minister Narendra Modi and President Trump set the timeline for finalizing a Bilateral Trade Agreement (BTA) within the next seven to eight months.
Negotiations for this trade deal are critical as the Trump administration prepares to levy reciprocal tariffs in early April to align with the tariffs imposed by other nations. Keshap highlighted that US-Indian investments have flourished without a formal trade framework, articulating that India currently represents just 2.5% of America’s trade, which has room for substantial growth. He urged both countries to formalize a level playing field alongside full market access and predictable regulatory policies to stimulate investment and job growth.
Despite business optimism surrounding these trade negotiations, some analysts caution against a comprehensive Free Trade Agreement (FTA) with the US. Such agreements could jeopardize previously negotiated terms. For instance, the NAFTA agreement was revised to the USMCA; similarly, analysts express concern over US demands for further concessions from India regarding tariffs, government procurement processes, and stricter patent protections.
Moreover, as reported, the US imposed a 25% tariff on imports from Canada and Mexico following a brief suspension. Concurrently, a 20% tariff was applied to Chinese exports to the US. Analysts worry that during negotiations, the US might insist on significant concessions from India, including the opening of government contracts and adjustments to agricultural subsidies, potentially undermining India’s longstanding policies.
The ongoing discussions between India and the US regarding a bilateral trade deal are crucial for enhancing economic ties and boosting GDP for both nations. However, India must be cautious of the concessions that may be demanded by the US to meet its trade objectives. The path forward necessitates a balanced approach that fosters mutual trade benefits while safeguarding India’s economic interests.
Original Source: www.business-standard.com
