The trade pact will further increase FDI flow
Ambassador Taranjit Singh Sandhu has called for the conclusion of the ongoing trade negotiations which would become the first phase of a comprehensive bilateral trade agreement between India and the United States.
Both countries are negotiating a limited trade deal with a view to iron out differences on export and import issues to boost economic ties which grew to US$150 billion in 2019 but have been impacted this year by the COVID-19 pandemic.
Industry observers added that any early conclusion of a trade pact between the two countries will also further increase the flow of American investments into the Indian industrializing economy.
“Our bilateral trade has not been immune to COVID-19 as total trade between the two countries has reduced by nearly 25% in the first half of 2020 as compared to 2019,” Press Trust of India quoted Sandhu as saying at a webinar organized by FICCI on 20 August 2020.
The US-India bilateral trade dropped 25% in the first half of 2020 compared to 10% year-on-year growth.
The US is today India’s biggest trading partner, but the real potential of the trade relationship is yet to be reached, the envoy told participants of the webinar.
The first step in realising this potential of the US-India trade is to conclude the ongoing trade negotiations which would become phase 1 of a comprehensive bilateral trade agreement, said Sandhu.
Such an agreement would reflect the full potential of bilateral and commercial relations, increasing bilateral investments and job creation in both the countries, he emphasised.
India is demanding exemption from high duties imposed by the US on some steel and aluminum products, resumption of export benefits to certain domestic items under the Generalized System of Preferences (GSP), and greater market access for its products from sectors such as agriculture, automobile, automobile components and engineering.
On the other hand, the US wants greater market access for its farm and manufacturing products, dairy items and medical devices, apart from a cut in import duties on some information and communication technology products. The US has also raised concerns over high trade deficit with India.
Sandhu’s call for early conclusion of trade negotiations echoes Indian industries’ sentiments and seeking to increase exports, increasing the share of Indian origin products in global markets.
The Indian industries are focused on reducing further already considered low production costs, investing in increasing output capacities, raising product qualities, standards and grades, as well as seeking international certifications to be globally competitive, industry observers said. #US #production #investment #manufacturing #collaborations #markets /fiinews.com
