Trade Deal with the US and India's Economic Strategy
India aims to position itself as a key investment destination under the 'China Plus One' strategy. A trade deal with the United States could significantly bolster these efforts by integrating India into global supply chains of American companies.
Market Access and Tariffs
- Tariff Reduction: India has room to reduce average tariffs on US exports, which could attract more US investments.
- Competitive Manufacturing: Goods manufactured in the US face challenges competing with those made in Asia due to reciprocal low tariffs in some Asian economies.
- Calibrated Market Access: Indian trade negotiators focus on balancing market access with potential foreign investments.
Sensitive Agricultural Issues
- Agricultural Safeguards: India seeks to protect its agriculture, particularly rainfall-dependent sectors, by implementing controlled trade environments for US farm produce.
- Price and Income Interventions: India aims to defend its agricultural pricing against large US subsidies.
- Nutritional Security: Agreements on items like poultry or dairy must enhance India's nutritional security to avoid political opposition.
Bilateral Services and Technology Trade
- Promising Services Trade: The growth in services trade is crucial, with Silicon Valley increasingly relying on Indian software engineers.
- Data Export Stance: India has eased its data export policies, aiming to become a global hub for data processing.
- Technology Transfer: Improved services engagement may lead to a favorable US stance on technology transfer.
- Domestic Tech Development: India should negotiate for increased US involvement in developing its technology hardware sector.
