25 February, 2020
2 Min Read
Syllabus subtopic: Bilateral, Regional and Global Groupings and Agreements involving India and/or affecting India’s interests.
Prelims and Mains focus: about Trump’s visit and its impact on India-US relations; the possibilities and the areas where bilateral trade could get a boost.
News: A trade deal during US President Donald Trump’s visit is unlikely. But a changing geopolitical landscape, coupled with closer ties with the US, makes a deal that benefits both nations inevitable.
What’s the state of Indo-US trade ties?
How will a deal impact bilateral trade?
How is an India-US deal different from the others?
A trade deal with the US could address issues related to tariffs and lead to India being viewed as an alternative for companies implementing a China+1 policy. This could result in sizeable investments in the manufacturing sector and deeper integration of India in global value chains. A deal would of course help expand Indian exports further.
Will it deepen India’s trade with the world?
So, why does a deal remain elusive?
The deal may be delayed due to limited consensus on its scope, combined with India’s reluctance to offer greater market access in areas such as communications technology, agriculture and medical devices. India’s agricultural sector remains a bottleneck for the signing of a trade deal with most developed nations, so a limited deal without addressing this issue is unlikely. But as the gains from a deal would be significant, it would be signed sooner rather than later.
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