US-India Trade: Beyond Mid-Negotiations, Deal Potentially Nearing
A strategic trade deal between the United States and India is perhaps bright than ever before as the External Affairs Minister of India, S. Jaishankar, remarked that the talks were past the halfway point.
US-India Trade Deal Nears Completion, Jaishankar Hints At Final Phase
A strategic trade deal between the United States and India is perhaps bright than ever before as the External Affairs Minister of India, S. Jaishankar, remarked that the talks were past the halfway point. This rosy picture, advanced after his latest visit to the US, is a demonstration that talks are on the front foot in terms of the need to boost economic relations involving the two biggest democracies in the world.
The two countries have banked on months of complex negotiations to create a bilateral trade agreement (BTA) that resolves a set of issues, such as market access and digital trade as well as tariffs and custom facilitation.
Not only is it aimed at settling the current conflict of trade but greatly increase the bilateral trade volume and with a bigger target of touching the multibillion mark of $500 billion by 2030 as compared to the current trading rate of $191 billion.
These negotiations are critical and acute as recent events demonstrated. There has been an Indian delegation in Washington D.C. where some serious negotiations are being done on several issues of the proposed BTA.
The way has been to aim at what have been termed as early mutual wins, to get momentum in reaching a substantial deal. This covers reciprocation of tariffs like the 26 percent tax that the US had earlier announced and went into abeyance and India wants it waived off completely.
There are among the key areas of contention and negotiation India’s requests for compromises in labor-intensive sectors such as textiles, garments, leather goods, and chemicals, and the US requests for a greater access to its market for agricultural products (such as apples, tree nuts, and dairy) as well as industrial goods and electric vehicles. The agricultural liberalization remains a big hurdle that the negotiators respectively stated requires “give and take” on both sides.
Notwithstanding the hurdles, the broader picture for US-India relations continues to be very positive. External Affairs Minister Jaishankar has consistently pointed to the ever-deepening strategic and economic convergences that are emerging between the US and India beyond political administrations. These ongoing discussions show, certainly on both sides, that both nations want to harness this robust partnership for economic prosperity.
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While the timing remains fluid for the comprehensive agreement, there seems to be a sense that an initial, perhaps provisional, trade deal will likely be made very soon, potentially before the July expiration of the current suspension of tariffs. This would establish a path for the more comprehensive BTA and a first-phase recommendations until the Autumn 2025 deadline. The coming days and weeks will be crucial in determining whether the intensive negotiations will lead to positive developments towards a more integrated and prosperous US-India economic future.
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