Hope to conclude trade talks with US 'sooner than later': Trade Secy Rajesh Agrawal

The statement by Trade Secretary Rajesh Agrawal regarding the active trade talks with the United States, aiming for a swift conclusion to regain better market access for Indian exporters, is a significant development in India's economic and foreign policy landscape. This engagement is particularly crucial given the backdrop of previously imposed US tariffs on Indian goods and India's ambitious export target for 2030.

**Background Context and Historical Friction:**

India and the United States have a complex and evolving trade relationship. While both nations have deepened their strategic partnership, particularly in defence and technology, trade relations have frequently been marked by friction. A key point of contention arose in June 2019 when the US, under the Trump administration, withdrew India's designation as a beneficiary country under its Generalized System of Preferences (GSP) program. The GSP allowed duty-free entry for thousands of products from developing countries into the US market. This withdrawal significantly impacted Indian exporters, particularly in sectors like textiles, chemicals, and engineering goods, leading to increased costs and reduced competitiveness. Prior to this, in 2018, the US had imposed tariffs on steel (25%) and aluminum (10%) imports globally, citing national security concerns (Section 232 of the Trade Expansion Act of 1962). India, in retaliation, imposed higher import duties on 28 US products, including almonds, apples, and pulses, escalating the trade tensions. Other long-standing issues include market access for specific agricultural products, intellectual property rights, and regulatory barriers in sectors like medical devices and information and communication technology (ICT) products.

**The Current Negotiations and Their Objectives:**

The ongoing discussions, as highlighted by Trade Secretary Rajesh Agrawal, aim to resolve these lingering issues and restore a more predictable and favorable trade environment. For India, the primary objective is unequivocally to regain better market access for its exporters. This involves negotiating for the removal or reduction of tariffs, addressing non-tariff barriers, and potentially exploring a restoration of GSP benefits or similar preferential treatment. The US, on its part, typically seeks greater market access for its products and services in India, resolution of intellectual property concerns, and a reduction in India's trade surplus. The optimism for a 'sooner than later' conclusion suggests a willingness from both sides to find common ground, potentially leading to a limited trade package rather than a comprehensive Free Trade Agreement (FTA) in the immediate future.

**Key Stakeholders Involved:**

On the Indian side, the **Ministry of Commerce and Industry**, led by the Trade Secretary, is the principal negotiator. **Indian exporters**, representing diverse sectors like pharmaceuticals, textiles, gems and jewellery, agricultural products, and IT services, are crucial stakeholders whose market access and profitability are directly affected. The **Ministry of External Affairs** also plays a role in shaping the broader strategic context of these trade talks. From the US perspective, the **Office of the United States Trade Representative (USTR)** is the primary negotiating body, working in conjunction with the **US Department of Commerce**. American industries and companies, particularly those seeking access to India's large consumer market or concerned about intellectual property, are significant stakeholders influencing the US position. International bodies like the **World Trade Organization (WTO)** provide the overarching framework for global trade rules, and disputes often refer to its mechanisms.

**Significance for India:**

The successful conclusion of these trade talks holds immense significance for India. Economically, it is vital for achieving India's ambitious export target of $1 trillion by 2030, a cornerstone of its economic growth strategy. Enhanced market access in the US, one of India's largest trading partners, can significantly boost exports, stimulate domestic manufacturing under the 'Make in India' initiative, create employment opportunities, and improve India's balance of payments. Geopolitically, a stable and robust trade relationship with the US strengthens the broader India-US strategic partnership, which is crucial in the context of regional security, supply chain diversification, and multilateral groupings like the Quad. Resolving trade irritants can free up diplomatic bandwidth to focus on other areas of cooperation, enhancing India's global standing.

**Constitutional and Policy Framework:**

While direct constitutional articles rarely dictate specific trade negotiations, the broader framework for international agreements and trade policy is well-defined. **Article 253** of the Indian Constitution grants Parliament the power to make any law for implementing any treaty, agreement, or convention with any other country or any decision made at any international conference, association, or other body. This empowers the Indian government to enter into and ratify trade agreements. Furthermore, **Entry 14 of the Union List (Seventh Schedule)** exclusively assigns the subject of "Entering into treaties and agreements with foreign countries and implementing of treaties, agreements and conventions with foreign countries" to the Union Parliament. The **Foreign Trade (Development and Regulation) Act, 1992**, is the primary legislation governing foreign trade in India, empowering the central government to make provisions for the development and regulation of foreign trade. The **Foreign Trade Policy (FTP)**, updated periodically (most recently FTP 2023), outlines the government's strategy and incentives for exports and imports, aiming to facilitate trade and integrate India into the global economy.

**Future Implications:**

The outcome of these talks could range from a limited package addressing specific tariffs and market access issues to a more comprehensive agreement. A positive resolution would signal renewed confidence in bilateral trade relations, potentially paving the way for a future Free Trade Agreement. It would also help diversify India's export markets and reduce reliance on specific regions, enhancing economic resilience. Conversely, a failure to reach an agreement could perpetuate trade tensions, potentially leading to further protectionist measures and hindering India's export ambitions. These talks are a barometer of the larger economic relationship and will influence investor sentiment and policy decisions for both nations in the coming years, particularly as global supply chains are being re-evaluated for resilience and geopolitical alignment.