Finance Minister Nirmala Sitharaman, in an exclusive interview with the Financial Express has said that India would love to have a “big, good, beautiful” trade agreement with the US. The FM also highlighted some red lines that India has drawn while negotiating with the US.
She said that US is one of India’s most important trade partners. Given where India is today and its aim to become a developed country by 2047, the FM added that it would be helpful to sign trade agreements with strong economies as soon as possible. Referring to Donald Trump‘s “big, beautiful bill” comment, she said she would be happy to see a “big and beautiful” trade deal between the two countries.
Sitharaman draws red lines in India-US trade talks
When asked what are the issues that India is absolutely not ready to compromise with, Sitharaman said that before starting the trade talks, India’s negotiating team made sure to consider all the concerns raised by the industries.
She said agriculture and dairy were sensitive areas, so the team was very careful while discussing them. However, she also mentioned that there are some areas where India can look for better market access and also consider opening up its own market in return.
Indian trade negotiators have extended their stay in Washington to try and settle key differences with the US. The talks, which were supposed to end on June 27, have gone on for an extra day, raising hopes of some progress. But a major sticking point remains – the US wants India to allow genetically modified (GM) crops into its agriculture market, according to media reports. India has firmly said no, arguing that these crops could harm farmers and affect food safety. While both sides are trying to find common ground, this demand for GM crop access reportedly continues to block the final agreement.
Sitharaman while speaking to the Financial Express said, “There’s no way we could do anything that would weaken our agriculture, our farmers‘ positions.”
FM on bilateral trade agreement
Speaking on the possibility of US reducing duties under the bilateral trade agreement, Sitharaman said for that purpose, Trump will have to the Congress, which is a time-consuming process for him. She said that they might pitch for the duty cut but it will only be done after the agreement is finalised.
What about relaxations to the US?
When asked if India will be offering any relaxations to the US on the non-tariff front, Sitharaman said that “trade negotiations should not get initiated by non-tariff concerns”.
Sitharaman explained that issues like the environment, sustainability, carbon taxes, government purchases, gender, and labour issues were not traditionally part of trade talks, but now they are being included. India is carefully deciding its stance on each of these areas. “We just can’t walk into it, because India is an emerging market, with our own market requirements,” the FM said.
Sitharaman further added that India, being an emerging economy, has its own market needs. Giving an example, she said when it comes to government purchases, India needs to protect sectors like MSMEs and start-ups that rely on support. “Our domestic procurement itself is very considerate towards those sections that need hand-holding. We can’t open it up for someone without these concerns addressed,” Sitharaman said.