US trade pact set for early finish: Piyush Goyal

Time of India

a day ago

India and the US are on track to seal a trade agreement before the deadline of fall 2025 set by PM
Narendra Modi
and President Donald Trump, commerce and industry minister
Piyush Goyal
told ET in an interview.
Goyal, who is on a four-day visit to Switzerland and Sweden, said the rare earth magnet supply squeeze by China is a wakeup call. Edited excerpts: Trade has now acquired a geopolitical dimension. How can India secure its interests? Today, India is sitting on the high table. We have
free trade agreements
(FTAs) with most developed nations—Japan and Korea, Australia, UAE, the four EFTA (European Free Trade Association) countries.
The FTA with the UK has already closed. We are in active dialogue with the US for a bilateral trade agreement, with the European Union for a free trade agreement… with Peru, Chile, and Oman. The entire world recognises India's growing strength.
'Perfect Opportunity'
The world recognises the decisive leadership Prime Minister Modi brings to the table and the opportunity of associating with the fastest growing large economy, which is expected to grow from $4 trillion to $5 trillion. It's a perfect opportunity. And, I think, no country would like to miss it.
India is in talks for multiple FTAs, some with advanced economies. How is the government preparing Indian industry to ensure that they can take advantage of these agreements? Also, are there policy interventions that are required to help them do so?
For the last 11 years of the Modi government, focus has been on ease of doing business, deregulating the economy, making it less difficult to meet regulatory compliances, and decriminalising our laws. He launched Make in India to encourage investments in the manufacturing sector. We have created a framework within the country with strong macroeconomic fundamentals. The government is ensuring that demand in the country remains robust and grows so that investors from around the world feel interested in working in India. I think the perfect foundation has been laid. Now with these free trade agreements, continuity, stability and predictability of policy will be available for our industry in advanced and developed economies, which is important for investment or business.
A case in point is the global capability centres (GCCs). During Covid, the nimbleness with which Prime Minister Modi adapted policy to ensure continuity of business earned India the tag of a trusted partner. All the work that people realised could be done working from home can also be done working from India. That's opened up a plethora of opportunities in terms of jobs. Millions of Indians are now working in GCCs. They're earning us billions of dollars of foreign exchange, adding to our construction and real estate ecosystem, providing tertiary jobs. Nearly 2,000 of them are in India today.
Where are we on the US trade agreement and is the baseline 10% tariff a sticking point?
We don't negotiate through the press. We negotiate on the negotiating table.
When can we expect the deal to come through?
We (US and India) are both committed to a bilateral trade agreement. Our leaders have set a task of completing the BTA by fall 2025. We are well on track to complete it before that.
Supply chains are facing new challenges. The rare earth magnet issue has again brought into focus the issue of secure supply chains. What is India planning to do to ring-fence its industry?
It is a wake-up call not just for Indian businesses but for businesses around the world. And this wake-up call will help all supply chains to reassess their resilience and their dependability on certain geographies. This will prompt them to look for trusted partners. For India, while we may have a problem with permanent magnets in the short run, we are already engaged with industry and with our startup ecosystem to find solutions. Even during the course of my stay in Switzerland, we discussed with some companies how they are coming around to address this problem. And I assure you that we are solving this problem. But this wake-up call will help people reassess the resilience of their supply chains and surely attract business to India.
IT services exports have helped make up the goods trade deficit. Is AI a threat to our services exports?
Certainly, some work and jobs will get impacted by AI. We cannot deny that. But we cannot cry over that, we have to find solutions. We have to adopt AI. We have to learn and retrain our people to be able to engage with AI. We have to leverage AI to our advantage so that instead of the current work that we are doing, we'll probably do even higher value-added work. At the end of the day, I believe the human mind is always supreme, because AI is largely dependent on what you feed into the system. I think there will be a rejig in the way work is done. There will be a need to retrain and reskill our people, but end of the day, I can assure you, India will come out the winner even in this.
The budget had announced an export promotion mission. How soon is it likely to be unveiled?
We have already worked out the areas which will be the focus of the available resources with the ministry. The effort is to promote new exporters, look at new markets and new products. The budget and the resources will help, particularly our MSME sector, our job generating sectors, our farmers, and to expand in the international markets.
(The reporter was in Switzerland and Sweden at the invitation of the commerce and industry ministry)