India is in an advanced stage of discussions on a trade agreement with the US, commerce and industry minister Piyush Goyal said on Monday.
He also said that the talks for the Terms of Reference of the Comprehensive Economic Partnership Agreement (CEPA) will be launched soon. He was addressing the media after announcing completion of negotiations on the FTA with New Zealand.
The New Zealand is the second FTA finalised this month after Oman. the Oman FTA was signed in Muscat last week.
While FTAs that have been signed have provided alternate markets to many sectors impacted by the 50% duties by the US on Indian imports, the real prize for now still remains the US deal.
India-US trade deal
The US deal is the key as it is the biggest export market for India. Though the exports to the US saw a rebound in November after the year-on-year decline in September and October, the labour intensive exports still suffer. The growth has come from mobile phones and refined product exports.
With the US, the talks are for a two stage agreement. In the first one India is seeking removal of extra duties. These duties have been imposed to address the trade deficit and punish India for buying Russian oil. After the initial pact both sides will continue negotiations on a Bilateral Trade Agreement (BTA) that was initially agreed to in February.
By March even the Terms of Reference of agreement were agreed to but after five rounds of talks, the additional duties intervened.
Trade talks with Canada
With Canada the talks on the cEpA is being revived after a gap of two years. In 2023 the talks were abandoned after 10 rounds of talks as the political and diplomatic relations between the two countries nosedived. The mending of relationship started with the new government in Canada and by November it was decided to take another shot at CEPA.
Goyal said that India has so far finalised FTAs with three members of the Five Eyes (FVEY) alliance – Australia, UK and New Zealand. The five countries of the intelligence sharing network are Australia, Canada, New Zealand, the UK, and the US. “This reflects the growing strategic importance of India in world geo politics,”he added.