India, US Make The Right Moves To Improve Trade Ties
Representational Image. Source: Reuters
At a recent event held in New Delhi, minister of commerce and industry Piyush Goyal stated he was eyeing an ambitious bilateral, trade target of trillion dollars between India and the United States by 2030. Currently, that number is ~$150 billion.
Goyal stated that “posterity would hold us responsible for not getting these two democracies together”, and that it behoved Washington and New Delhi with their shared democratic values, the diaspora connect, and synergy across technology and innovation to further this trade partnership, in order to benefit the global community at large.
On November 23, the US-India Trade Policy Forum (TPF) resumed dialogue after a hiatus of four years, after US Trade Representative Katherine Tai’s maiden visit to New Delhi as US President Joe Biden’s trade czar. Tai and Goyal put out a joint statement after the twelfth ministerial-level TPF, and espoused a shared vision for “the future of the trade relationship”, as bilateral merchandise trade in the current year is poised to cross the $100 billion mark.
Goyal touched on the reforms and progress made by the Government of India, namely the infrastructure boosts through schemes such as Gati Shakti, along with the $1.5 trillion National Infrastructure Pipeline (NMP) in green and brown field projects. The creation of an asset reconstruction company to resolve bad assets in the banking system, reducing corporate tax to 15 percent, removing retrospective taxation, and moving towards a simplified tax regime was welcomed.
The elephant in the room was the trade deal or a free trade agreement (FTA), where Goyal reminded that India has many such agreements in place. India currently has an FTA with Japan, and there is an early harvest deal with Australia, and the target is to have an FTA by the end of 2022.
Outside the Quad, India has the India-ASEAN FTA agreement with the 10 Southeast nations, an FTA with South Korea, and even a SAFTA neighbourhood agreement. There are discussions in advance stages for FTAs with the United Arab Emirates (UAE), the United Kingdom, and the European Union.
While India has inherently been accused of being protectionist, and abjuring from larger trade deals such as the Regional Comprehensive Economic Partnership (RCEP), it still continues to engage with RCEP members in all sincerity. In…