Negotiating trade deals from a position of strength, says Piyush Goyal

India is negotiating trade agreements from a position of growing economic strength, confidence and scale, Union Commerce and Industry Minister Piyush Goyal said on Sunday. He said the country, with its fast economic expansion, is offering a future market of around $35 trillion.

 

“That's what is our negotiating strength,” Goyal told Press Trust of India (PTI) Videos in an interview. “Today, India negotiates from a position of strength. We are a $4 trillion economy today, but it is going to be $30-35 trillion by 2047 when we are a developed economy.”

 

“And that is the confidence that India has today. That delta of opportunity from $4 trillion to $30-35 trillion, that is the future we offer,” he added.

 

Against this backdrop, Goyal said India would face no difficulty in purchasing goods worth $500 billion from the United States over the next five years under a proposed bilateral trade pact, describing the figure as modest for an economy with global ambitions. “So, $100 billion (per year) is very conservative. I think it's extremely conservative for a country which wants to become a $30 trillion economy, which India intends to.”

 

“My sense is we need at least over $100 billion only for the aviation sector, in addition to oil, LNG, LPG, and crude oil,” Goyal said, adding that demand for US goods would be driven by India’s expanding infrastructure, energy and technology needs.

 

According to a joint statement issued on Saturday outlining the framework for the first phase of the bilateral trade agreement, India has expressed its intention to purchase $500 billion worth of US energy products, aircraft and aircraft parts, precious metals, technology products and coking coal over the next five years.

 

The minister also said India had agreed to provide quota-based duty concessions on dried distillers' grains (DDGS) to the US under the trade deal, responding to demand from the domestic animal husbandry and poultry sectors, which value the product for its high nutritional content.

 

He said Indian products facing 18 per cent tariffs in the US would remain competitive compared with goods from China and other Asian economies that face higher levies. China, he noted, has been hit with tariffs of 35 per cent, while other countries in the region face rates of 19 per cent or higher.

 

At present, India could potentially source imports worth about $300 billion from the US that it currently buys from other countries, Goyal said, adding that India currently imports goods worth about $40–50 billion annually from the US.

 

Highlighting areas where purchases from the US could increase, he said major technology firms had announced large investments in India, leading to significant demand for data centre equipment.

 

“My sense is that we will see 10 gigawatts of data centres,” he said.

 

“We are going to need aircraft. We are going to need engines for aircraft. We are going to need spare parts. We already have $50 billion worth of orders on Boeing alone for aircraft. We have orders for engines,” he added, describing the US as the world’s most powerful technology provider.

 

Goyal said India’s reciprocal tariffs were now among the lowest compared with its peers, including China (35 per cent), Thailand (19 per cent), Myanmar (40 per cent), Cambodia (19 per cent), Bangladesh (20 per cent), Indonesia (19 per cent), Brazil (50 per cent) and Vietnam (20 per cent). Lower tariffs would give Indian labour-intensive sectors -- such as textiles, leather, footwear, handicrafts, chemicals, and gems and jewellery -- a competitive edge in the US market, he said.

 

On concerns over a surge in US imports, Goyal said adequate safeguards were built into the trade agreement to protect farmers and domestic industry. The deal, he said, would ultimately benefit Indian farmers, who already export $50–55 billion worth of agricultural and fish products annually.

 

“This is a two-page document (the India-US joint statement),” he said, stressing that negotiations were ongoing and safeguards were a standard feature of trade talks. India, he added, had not granted duty concessions on dairy products, genetically modified products, meat, poultry, soya meal or corn.

 

However, India has agreed to limited concessions on DDGS. “I've given them a quota in DDGS. It's an animal feed, very high in nutrition. Animal husbandry, in fact, wants it. Poultry people are craving for it. It makes the chicken much, much healthier. Very high protein,” he said, adding that the quota-based approach would help balance competing interests.

 

According to the joint statement, the first phase of the India-US bilateral trade agreement is expected to be signed by mid-March.