Is India close to signing a historic Free Trade Agreement (FTA) with the US? Commerce Minister Piyush Goyal said US trade representative Robert Lighthizer concurs with him on the huge potential an FTA would offer the world's two largest democracies.
"We hopefully will come out with the first set of agreements soon. But we both believe that India and the US should look at a much larger engagement in days ahead, possibly leading to an announcement for a bilateral agreement which will go beyond the mere tinkering that we are doing at present," Goyal told the US-India Strategic Partnership Forum.
Observers believe that any move in the direction of an FTA will be a huge step for the two countries as the US has been reluctant to enter into FTA with a nation unless it has underlying strategic dimensions.
Even the mention of FTA in the context of the Indo-US relationship is a tectonic shift to some observers. They think that any talk in the direction would indicate a stronger underlying strategic partnership, especially as India's defence purchases from the US are expected to hit $18 billion soon.
India-US trade deal
India had wanted the announcement of a trade deal between the two countries during Prime Minister Narendra Modi's US visit for the headline engagements of 'Howdy, Modi' and the United Nations General Assembly (UNGA) address. New Delhi was particularly keen on announcing at least a preliminary deal during Modi's summit meeting with US President Donald Trump.
Such an announcement would have been sort of a coup considering the recent low in the relations between the two countries with tariff hikes and the removal of India from the Generalized System of Preferences (GSP) in which the US has retained Pakistan. The removal from the GSP means higher tariff barriers for India's agricultural produce for access to the US market.
The trade deal announcement could not be made during Modi's visit as some key issues remained unresolved, reports say. India and the US have laid out the broad contours of the proposed trade package and may announce it after closing the gaps, Livemint quoted Goyal as saying. Goyal attributed the delay in finalizing the deal to the preoccupation of his US counterpart Robert Lighthizer with trade talks with Japan and China.
"Therefore, probably, the finalisation of the trade package got a little delayed. But we have almost resolved the broad contours of what we are going to announce. I don't see any great difficulty in closing the gaps on the first announcement," Goyal said. US Commerce Secretary Wilbur Ross has said there is "no structural reason" why there can't be a trade deal with India quickly.