New Delhi – Union Commerce and Industry Minister Piyush Goyal has announced that India-US trade talks are progressing smoothly, with no significant obstacles remaining. In an exclusive interview, the minister revealed that bilateral negotiations between the two nations can now move towards closure, marking a significant milestone in economic cooperation.
Shift in India’s Trade Strategy
Goyal described a fundamental transformation in India’s approach to international trade negotiations. The minister emphasized that New Delhi has moved away from protectionist policies of the past to embrace confident engagement with developed economies. For a nation aspiring to become a $30 trillion economy by 2047, isolation is not an option. This strategic shift reflects India’s growing economic strength and global standing.
The India-US trade talks represent just one aspect of this broader transformation. The minister noted that India now negotiates from a position of strength, focusing on future economic potential rather than current metrics. This forward-looking approach has proven successful in recent agreements with the United Kingdom and European Union.
EU Trade Agreement Success
Three days before discussing the India-US trade talks, India and the EU successfully concluded negotiations for a comprehensive free trade agreement. The EU’s commitment to this partnership was evident through the appointment of Maroš Šefčovič, their most experienced commissioner, specifically to finalize the deal. Over a year and four months, he met with Goyal ten times, demonstrating unprecedented dedication to the agreement.
The EU deal provides valuable insights into India’s negotiating success. Both parties agreed early to set aside sensitive issues, allowing progress on areas of mutual benefit. The agreement addresses critical concerns, including carbon border adjustment mechanisms and provides pathways for Indian talent mobility across member states.
Manufacturing and Export Growth
The EU agreement is expected to boost India’s manufacturing sector significantly. Goyal revealed that labour-intensive exports worth $33.5 billion out of $35 billion will receive zero-duty treatment from day one. The textile sector alone could potentially reach $40-50 billion in exports to the EU, compared to the current $7 billion.
This transformation is particularly significant when compared to Bangladesh, which currently exports $30 billion to the EU versus India’s $7 billion. With the elimination of tariff disadvantages, India is positioned to dramatically increase its market share. The India-US trade talks are expected to yield similar benefits for Indian exporters.
Strategic Approach to Negotiations
The minister explained that India’s current negotiating strategy differs fundamentally from past approaches. Prime Minister Narendra Modi’s directive to negotiate based on India’s future $30 trillion economy rather than its current $4 trillion size has transformed discussions. This perspective positions India as an equal or superior partner in the India-US trade talks and other negotiations.
Goyal acknowledged past mistakes, noting that India lost millions of jobs and billions in foreign exchange earnings by delaying trade agreements. For instance, concerns over protecting a mere 6,000 grape farmers producing wine worth approximately ₹1,000 crore prevented larger opportunities. This pragmatic recognition has enabled more balanced negotiations.
Automobile Sector Protection
Despite opening markets, India has successfully protected its domestic automobile industry. European manufacturers cannot produce vehicles below €15,000, and after accounting for clearing, forwarding, marketing, showroom costs, and GST, they cannot compete in the segment representing 90% of India’s market, where selling prices are around ₹20 lakh.
Canada and Other Partnerships
With Prime Minister Mark Carney’s upcoming visit in March, Canada has expressed keen interest in accelerating trade discussions. While negotiations must start from scratch, both nations are working on terms of reference. The India-US trade talks, however, are further advanced and closer to conclusion.
Moving Forward
Regarding the India-US trade talks specifically, Goyal confirmed that no sticky issues remain unresolved. Both sides are actively engaged, though no deadline has been set. The minister emphasized that deals are concluded when both parties are satisfied, not according to arbitrary timelines.
Despite US tariffs imposed last August, Indian exports have shown positive growth. This resilience reflects greater consciousness among exporters to explore new markets and products. New exporters are emerging, and service sectors are evolving into new-age technologies.
Future Agenda
Looking ahead, the government will continue promoting manufacturing and services while providing significant support to innovation, research and development, and startups across technology, agriculture, and biotechnology sectors. International engagements will focus on aligned partners, particularly in the developed world.
The minister stressed that export-driven growth remains vital for India’s development, noting that no country has achieved developed status without robust international engagement. As the India-US trade talks near completion, India stands poised to leverage its strengthened negotiating position for mutual economic benefit.
