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The article highlights India's willingness to expedite a trade agreement with the United States by initially focusing on readily achievable aspects, referred to as "low-hanging fruits." Commerce Minister Piyush Goyal emphasized this approach, stating India's readiness to finalize a trade pact with the US by first addressing these less contentious issues. The US team is currently in New Delhi for trade talks with their Indian counterparts, with deliberations scheduled to conclude on June 10th. Goyal, expressing optimism, suggested that progress could be made before July 9th. He underscored the idea that resolving every intricate issue in a trade agreement is not a prerequisite for making headway. India's strategy involves capturing the benefits of sectors where agreement is easily reached, rather than waiting for a perfect, all-encompassing resolution. Citing the trade agreement with Australia as an example, Goyal noted that both countries implemented an interim deal while continuing to negotiate a broader agreement. The ongoing negotiations in New Delhi are aimed at furthering the proposed bilateral trade agreement. In February, President Trump and Prime Minister Modi announced plans to negotiate the first phase of a mutually beneficial Bilateral Trade Agreement (BTA) by the fall of 2025. The goal is to more than double bilateral trade to USD 500 billion by 2030 from the current USD 191 billion. Goyal's visit to Switzerland further underscores India's commitment to boosting trade and investments. The potential for an interim trade agreement by the end of June is being actively pursued, with India advocating for full exemption from the 26 per cent reciprocal tariff on domestic goods. The US has suspended these proposed tariffs until July 9th, increasing the likelihood of finalizing an interim agreement before that date. Recent talks between India's chief negotiator, Rajesh Agrawal, and his US counterpart in Washington have also contributed to the momentum. Goyal himself had previously visited Washington to advance the trade discussions. The US has consistently been India's largest trading partner for the past four years, with bilateral trade amounting to USD 131.84 billion in 2024-25. The US accounts for a significant portion of India's total goods exports, imports, and merchandise trade. The article also mentions the Economic Times WhatsApp channel subscription option, which is more related to promotion but only at the start of the article.
The concept of focusing on "low-hanging fruits" in international trade negotiations is a common strategy aimed at achieving early wins and building momentum for more comprehensive agreements. It involves identifying and resolving the least contentious issues first, thereby creating a foundation of trust and cooperation that can facilitate progress on more complex matters. In the context of the India-US trade talks, this approach could involve addressing tariffs on specific goods or services where there is already a significant level of agreement, streamlining customs procedures, or harmonizing regulatory standards. By achieving tangible results in these areas, both countries can demonstrate their commitment to strengthening their economic relationship and create a positive atmosphere for tackling more challenging issues such as intellectual property rights, agricultural subsidies, and market access for specific sectors. The reference to the India-Australia trade agreement as a precedent further reinforces the viability of this phased approach. In that case, both countries implemented an interim trade deal that provided immediate benefits to businesses and consumers, while continuing to negotiate a broader agreement that addressed a wider range of issues. This approach allowed both countries to reap the benefits of closer economic ties without having to wait for a complete resolution of all outstanding issues. The emphasis on increasing bilateral trade to USD 500 billion by 2030 highlights the ambitious goals of the India-US trade negotiations. Achieving this target will require significant reductions in trade barriers, increased investment flows, and greater cooperation in areas such as technology, innovation, and infrastructure. The US is a crucial market for Indian exports, particularly in sectors such as IT services, pharmaceuticals, and textiles. Conversely, India represents a large and growing market for US goods and services, including agricultural products, machinery, and financial services. A comprehensive trade agreement between the two countries would create significant opportunities for businesses in both countries and contribute to economic growth and job creation.
The significance of the US as India's largest trading partner cannot be overstated. The sheer volume of bilateral trade, valued at USD 131.84 billion in 2024-25, underscores the deep economic ties between the two countries. The fact that the US accounts for a substantial portion of India's total goods exports, imports, and merchandise trade further emphasizes the importance of this relationship. From India's perspective, access to the US market is crucial for its export-oriented industries, particularly in sectors where it has a competitive advantage. The US market provides opportunities for Indian businesses to scale up their operations, invest in new technologies, and create jobs. Similarly, the Indian market offers significant potential for US companies looking to expand their global footprint. India's large and growing population, its rapidly expanding middle class, and its increasing integration into the global economy make it an attractive destination for US investment and exports. A successful trade agreement between India and the US would not only benefit the two countries directly but also send a positive signal to the rest of the world about their commitment to free and fair trade. In a global economy that is increasingly characterized by protectionism and trade tensions, a strong and vibrant economic relationship between India and the US would serve as an important anchor of stability and prosperity. Furthermore, a closer economic partnership between the two countries could also have broader geopolitical implications, strengthening their strategic alliance and promoting stability in the Indo-Pacific region. The article mentions India pushing for full exemption from the 26% reciprocal tariff. This is a crucial point. India aims to reduce or eliminate existing tariffs on its exports to the US, and for the US to eliminate the retaliatory tariffs imposed earlier. This is a fundamental aspect of any trade agreement and directly impacts the competitiveness of Indian goods in the US market. Finally, this pursuit of interim trade deal shows the willingness of both sides to find a pragmatic solution. An interim deal can lay the groundwork for a more comprehensive agreement, setting the stage for long-term economic collaboration.
Source: India always ready to conclude trade pact with low hanging fruits: Piyush Goyal on US trade deal