India-US Bilateral Trade Agreement Preparations
India is gearing up for the initial phase of bilateral trade agreement (BTA) discussions with the United States. The Commerce and Industry Ministry is engaging in consultations with various ministries to identify India's priorities and interests for the proposed deal.
Consultation and Preparation
- Consultations are being held with concerned ministries and departments to pinpoint sector-specific priorities.
- The nature of the BTA is being considered, with possibilities of an interim agreement or one involving investment commitments.
- Negotiations are anticipated to begin within the next 10 days, pending the appointment of the US Trade Representative (USTR).
- Discussions are ongoing with the Revenue Department to address any discrepancies in tariff data before negotiations with Washington.
Trade Dynamics and Strategy
- US President Donald Trump has criticized India's tariffs, threatening reciprocal tariffs on Indian imports to the US.
- The Ministry is engaging with multiple ministries to ensure a unified approach towards reciprocal tariffs and India-US trade aspects.
- Tariff concessions are being explored on both a preferential basis specific to the US and on a most favored nation (MFN) basis.
Future Outlook
- India aims to more than double bilateral trade with the US to $500 billion by 2030.
- A mutually beneficial, multi-sector BTA is targeted for completion by fall 2025.
- The US is currently India's largest trading partner, with India having a trade surplus with the US.
- The BTA is seen as a pathway to expanding trade, focusing on industrial and labor-intensive goods.
Interim and Final Agreements
- There is a precedent for interim agreements, followed by comprehensive ones, as per WTO rules.
- Countries can opt for an interim or "early harvest" agreement, similar to Australia, before committing to a final, more comprehensive pact.
