India-US trade: Despite a personal chemistry between the leaders of the two countries, India's bilateral trade remained below $150 billion last year.
Indo-US free trade agreement: India and the US are close to finalising a bilateral trade deal that will help both the countries to achieve bilateral trade target of $500 billion a year. India-US will soon have a trade deal said US President Donald Trump after a bilateral meeting with Prime Minister Narendra Modi. This is second meeting between the leaders during this visit of Prime Minister Modi to the country following a joint public rally Howdy, Modi in Houston, Texas.
“I think very soon we’ll have a trade deal. We’ll have the larger deal down the road a little bit, but we will have a trade deal very soon,” Trump told reporters after meeting with Prime Minister Narendra Modi on the sidelines of the annual United Nations General Assembly.
Despite a lot of potential, the bilateral trade between the countries has been below the potential. India’s share in the US’ global trade remained below $150 billion last year, which is just one-fifth of China’s bilateral trade with the country.
President Trump’s latest statement indicates a reversal of policy towards India as he has often described Indian tariff rates as ‘very high’. In June this year, President Trump also withdrew the preferential treatment given to Indian exporters under the Generalised System of Preference (GSP) benefits. These GSP benefits are unilaterally given by the US to developing countries so that they can diversify their trade with the US.
It was estimated that benefits worth $6 billion accrued to Indian exporters per year due to GSP benefits. In response, India also announced retaliatory measures.
However, the Union government was quietly working for several months to improve the bilateral relations ahead of Prime Minister Modi’s visit this month.
Talking about the agenda of Prime Modi’s US visit, commerce minister Piyush Goyal had said that India should not aim for bilateral trade of less than $500 billion with the US. Experts believe that a bilateral trade deal with the US will help India to achieve the bilateral trade target of $500 billion.