ForumIAS announcing GS Foundation Program for UPSC CSE 2025-26 from 19 April. Click Here for more information.
ForumIAS Answer Writing Focus Group (AWFG) for Mains 2024 commencing from 24th June 2024. The Entrance Test for the program will be held on 28th April 2024 at 9 AM. To know more about the program visit: https://forumias.com/blog/awfg2024
Source: The post is based on the article “From state visit to a more robust trade relationship” published in “The Hindu” on 3rd August 2023.
Syllabus: GS2- Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
News: In this article author discusses the historic visit of India’s Prime Minister to Washington. They highlight the growing U.S.-India partnership, especially in defense and technology. However, the trade relationship, though improving, hasn’t reached its potential. Both nations should prioritize creating a strong Free Trade Agreement to maximize benefits.
About India-US trade
Historic Visit: India’s PM 2023 visit to Washington strengthens U.S.-India relations.
Current Trade: Exceeds $120 billion.
U.S. Approach: Shifted from traditional FTAs, emphasizing resilient supply chains and labor rights.
Enhancing Relations: Resolved six WTO disputes during India’s PM US visit; potential for a major Free Trade Agreement.
Agriculture Trades: Exchanges like mangoes for India and cherries for the U.S. without an FTA.
Trade Potential: By prioritizing, bilateral trade could reach $500-$600 billion by 2030.
What is the U.S.’s current trade approach?
Shift from FTAs: The U.S. has evolved away from Free Trade Agreements.
Supply Chain Focus: Emphasis on creating resilient supply chains.
Reshoring and Friend-shoring: Aim to bring production back to the U.S. or move to friendly countries.
Labor and Environment: Prioritizing labor rights and environmentally friendly production over traditional globalization.
Skeptics’ Views: Many believe the U.S.’s goals could be better achieved with a revamped FTA strategy.
How can both countries enhance their trade relationship?
Resolve Disputes: During recent India’s PM US visit, six disputes under the World Trade Organization were settled.
Explore FTAs: Both countries should consider major Free Trade Agreement negotiations.
Utilize Past Successes: Examples include small trade deals like exchanging mangoes, pomegranates from India for U.S. cherries, hay, and pork.
Agriculture Opportunities: India has shown willingness to open its agricultural market in exchange for concessions, as seen with Australia gaining access for wine, wool, and sheep meat.
Work Towards Major Agreements: Initiating negotiations for a comprehensive Free Trade Agreement could cover a wider range of goods and services.
Stronger Leadership Mandate: Trade needs more attention from both Biden and Modi administrations for better outcomes.
Set Ambitious Goals: Aiming for $500-$600 billion in bilateral trade by 2030 is possible with a focused approach.
