Focus on its economy may've led US to put India deal on the back burner

India will look at working with the US on market access issues to promote bilateral trade, with the US indicating that it is not looking at new trade agreements. Commerce minister Piyush Goyal on Thursday said that addressing market access issues on both sides will be a big opportunity for our export sector.
 
Government officials said circumstances are now different, with a change in the administration in the US and President Joe Biden taking over in January.
 
“The US’s priority right now is focusing on economic revival (post Covid) as well as sorting out existing multilateral trade issues. As far as India is concerned, the focus is on fast tracking trade deals with countries such as the UK, European Union and Australia,” one of the officials cited above told Business Standard.
 
“A trade deal with the US may not happen in the near future,” the official said.
 
In the past, India had extensive discussions with the US on a limited trade deal. Both nations had also recognised the complementarities of bilateral trade. They had discussed the possibility of a free-trade agreement (FTA). However, the limited trade package was not signed as some contentious issues were not resolved. Thereafter, with the Biden administration taking over, it was understood that both nations would put together a fresh trade package.

Experts said India and the US could never have a full-blown trade deal or even a limited one. Both the nations have been functioning under the rules of the WTO. The US has consistently remained one of the largest export markets for India for over a decade.
 
“We can promote India-US trade through an investment agreement. An investment agreement will be easier to take off. In any case, the US is the biggest investor in India. An investment agreement gives an opportunity for closer economic cooperation,” said Pradeep S Mehta, secretary general, CUTS International.
 
“A mini trade deal was also one of the ways to sort out friction in some areas. Our concern with the US was that the GSP was not restored. The approach, at the moment, should be to list out the differences and resolve them,” said Mehta. US trade representative Katherine Tai had said India and the US had agreed to build up engagement through the US-India Trade Policy Forum, find ways to expand trade relationship, as well as cooperate on a host of issues. “India and the US need to reach a consensus on some thorny issues, without which a (mini) trade deal can never progress. They have to understand and accede to the demands of one another,” said Arpita Mukherjee, professor at the ICRIER.
 
Mukherjee further said that India also needs to undertake some domestic reforms, do a product-by-product analysis of tariffs and understand why tariffs are high.