India Should Ensure Trade Deal With US Is Balanced And Reciprocal, Says GTRI

The limited trade deal announced between the US and UK on May 8 offers clues about the kind of trade arrangements Washington may pursue with other major partners, most notably India, the GTRI said.

A team of senior officials from India is expected to again visit Washington this month to hold discussions with their US counterparts on the proposed BTA.

Source : Freepik

India should take cues from the US-UK trade pact and exercise caution while negotiating an agreement with America to ensure that the deal is reciprocal, balanced, and not driven solely by political considerations, economic think tank GTRI said on Saturday.

The limited trade deal announced between the US and UK on May 8 offers clues about the kind of trade arrangements Washington may pursue with other major partners, most notably India, the Global Trade Research Initiative (GTRI) said.

A closer look reveals that while the UK has made sweeping tariff concessions to America, the US has offered far less in return, it added.

"If the UK-US deal sets the template, India can expect growing US pressure to finalise a mini-deal of its own - focused on tariff cuts and key strategic commitments rather than a full free trade agreement (FTA) that may come much later," the think tank said.

It also cautioned that India may be asked to reduce tariffs on a basket of sensitive agricultural products, including soybeans, ethanol, apples, almonds, walnuts, raisins, avocados, spirits, many GM (genetically modified) products and meat and poultry.

Tariff concessions on automobiles are also expected, as India has already agreed to reduce duties on select UK vehicles from 100 per cent to 10 per cent under its recent agreement announced on May 6.

"As with the UK, the US is also expected to push India for large-scale commercial purchases. These could include Oil, LNG, military and civilian aircraft from Boeing, helicopters, or even nuclear reactors," GTRI founder Ajay Srivastava said, adding that India must tread cautiously while negotiating the proposed bilateral trade agreement (BTA) with the US.

The UK has agreed to cut tariffs on over 2,500 US products - ranging from olive oil to ethanol, signalling a deep market opening. In sharp contrast, the US has cut tariffs on fewer than 100 British items, and even then, most of the reductions stop at a baseline 10 per cent rather than full elimination, he said.

"India must not walk into a similar trap. Any trade deal with the US must be reciprocal and equitable, not one-sided or politically driven. India must insist on a balanced, fair, and sovereign approach to negotiations. If that balance cannot be achieved, India is better off walking away from the deal," Srivastava said.

A team of senior officials from India is expected to again visit Washington this month to hold discussions with their US counterparts on the proposed BTA.

To give impetus to the talks, India's chief negotiator Rajesh Agrawal, special secretary in the Department of Commerce, and Assistant US Trade Representative for South and Central Asia Brendan Lynch had last month held three-day talks in Washington. 

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)