India-US economic partnership needs more energy

Source: The post is based on thearticle “India-US economic partnership needs more energy” published in Business Standard on 13^thMarch 2023.

Syllabus: GS 2 –International Relations

Relevance: India-US bilateral relations

News:India-US Commercial Dialogue was held recently in which Union Commerce Minister Piyush Goyal met his US counterpart. The discussions were held on various issues.

What were discussions made in the India-US Commercial Dialogue?

Mid-year review: Both sides agreed for a mid-year review of outstanding issues by their officials.

Supply-chain resilience: They both agreed to cooperate in supply-chain resilience by decoupling from China-centred production networks.

The other areas on which discussions made were –iCET, green and digital economies and IPEF.

However, problems like tax policy in India and end-use restriction along with other restrictions in the US were not discussed at the commercial dialogue.

The India-US Commercial Dialogue show that both nations are moving towards a strong partnership. However, concerns still remain.

What are the concerns with the bilateral trade between India and the US?

The attitudes in both countries on trade have reversed in the past decade.

For example, the Indian government is focusing on signing FTAs while the US has closed itself off from further trade negotiations and continues to hold the World Trade Organization and the multilateral system.

Furthermore, there have been no discussions on market access which the US provides for its partners.

US companies are also not as interested in the sectors like job-intensive, industrial, or infrastructure-related, that are of most interest to the Indian side.

Even in the case of iCET, the question remains whether the iCET can be leveraged in such a way that both countries benefit from integrating their hi-tech sectors.

However, despite these concerns, the US plays an important role in improving India’s economy. Therefore, regular discussions at policy level should be held. This will help in taking economic relations forward.