2 days ago
Cloud of uncertainty over Indo-US BTA seems to be lifting
After weeks of uncertainty and doubts over the US-India trade deal, it seems like it may finally be signed shortly. It may be recalled that the 90-day pause for the tariffs that US President Donald Trump imposed nears its end. He announced the pause on April 9. Washington imposed a 26 per cent tariff rate on Indian made goods. External Affairs Minister S. Jaishankar is quoted as saying, 'We are in the middle—more than the middle—of a trade negotiation. I hope to bring it to a conclusion, but I can't guarantee it as there is another party involved.'
He hinted that this could be done 'over the next few days.' Incidentally, the US has corroborated this. Saying that Trump shares a 'very good relationship' with Prime Minister Narendra Modi, the White House press secretary Karoline Leavitt confirmed this much during a press briefing: 'Yes, the President said that last week [that the US and India are very close to a trade deal], and it remains true. I just spoke to our Secretary of Commerce about it.
He was in the Oval Office with the President. They are finalising these agreements, and you'll hear from the President and his trade team very soon when it comes to India.' Hopefully, the optimism expressed by Delhi and Washington materialises. For, quite apart from the knotty bilateral issues, there is the matter of Trump taking credit for stopping the hostilities between India and Pakistan in May. The Indian government didn't like that; this also apparently resulted in the hardened stance by our negotiators. Besides, many Sangh Parivar-affiliated bodies like the Bharatiya Kisan Sangh (BKS) and Swadeshi Jagran Manch (SJM) were opposed to certain aspects of the India-United States bilateral trade agreement (BTA).
These aspects are related to genetically modified (GM) crops, dairy products, relaxed regulations on medical devices, and data localisation. It looks like the government, while addressing the genuine concerns of the BKS-SJM types, has ignored their ideologically motivated demands. This is quite appropriate for policy formulation. The proposed US-India BTA holds significant potential to transform the economic and strategic landscape between the two nations. Beyond the immediate goal of boosting bilateral trade volumes, the BTA can catalyse deepening economic integration and fostering long-term cooperation in key sectors.
Increased market access and reduced trade barriers under the agreement would likely encourage higher US investments in India, particularly in areas like manufacturing, infrastructure, energy and services. Furthermore, the BTA could facilitate the transfer of advanced technologies, especially in critical domains like defence, information technology, renewable energy, and pharmaceuticals. This technology sharing would not only strengthen India's domestic capabilities but also enhance its global competitiveness. Small and medium-sized enterprises (SMEs) in both countries could particularly benefit from easier market entry and reduced regulatory hurdles, thereby promoting inclusive economic growth.
On a strategic level, the BTA can consolidate the growing US-India partnership, which is increasingly seen as vital for maintaining balance and stability in the Indo-Pacific region. Moreover, enhanced economic ties will complement the existing defence and security cooperation, reinforcing the shared commitment to a free, open, and rules-based international order. Ultimately, the BTA has the potential to evolve from a mere trade pact into a cornerstone of a robust, multifaceted US-India alliance that spans commerce, technology, investment, and geopolitics.
