New Delhi, Feb 16: The decision to begin negotiations for a bilateral trade agreement between India and the United States has significantly increased business optimism in both nations. Commerce and Industry Minister Piyush Goyal stated on Sunday that this initiative could substantially enhance economic relations by utilizing their competitive advantages.
Following Prime Minister Narendra Modi’s recent visit to Washington, India and the US declared their aim to more than double their mutual trade to USD 500 billion by 2030 and initiate discussions on a comprehensive and mutually beneficial multi-sector bilateral trade agreement (BTA) by the fall of 2025.
“The Prime Minister has returned with an agreement or understanding to pursue a trade deal by the end of this year. This instills considerable confidence and relief among businesspeople in both the US and India who believe that, together, we can genuinely reshape global trade. By harnessing our different competitive strengths, we can function as true friends and partners in progress and prosperity,” Goyal remarked.
Typically, a free trade agreement sees two trading partners reducing or abolishing customs duties on most goods exchanged between them. Additionally, such agreements typically relax regulations to facilitate service trade and enhance investment.
In the first term of former US President Donald Trump, discussions were held regarding a mini-trade deal, but the Joe Biden administration decided not to pursue such agreements.
The minister also highlighted that India is expanding its global reach by establishing new partnerships through trade agreements with developed countries including Australia, the UAE, and the EFTA bloc.
The members of the European Free Trade Association (EFTA) comprise Iceland, Liechtenstein, Norway, and Switzerland.
“The advancements we are achieving through various engagements in Europe, as well as the progress expected with the US as we work towards finalizing a trade agreement by the end of this year, illustrate India’s increasing significance on the global stage,” he noted at the ET Now Global Business Summit.
In 2023, bilateral trade between the US and India in goods and services was valued at USD 190.08 billion (USD 123.89 billion in goods and USD 66.19 billion in services). During this period, India’s merchandise exports to the US totaled USD 83.77 billion while imports reached USD 40.12 billion, resulting in a trade surplus of USD 43.65 billion for India.
Additionally, India’s service exports to the US stood at USD 36.33 billion in 2023, whereas total imports were USD 29.86 billion, which means a trade surplus of USD 6.47 billion for New Delhi.
Furthermore, he indicated that the government is implementing various measures to enhance domestic manufacturing.
“The Make in India initiative is now set to be propelled by a National Manufacturing mission, which will provide innovative solutions and address the hurdles faced by manufacturing in India, particularly by MSMEs, ensuring that manufacturing in India becomes more competitive,” he added. (PTI)
