India-US bilateral trade in goods and services will reach $500-600 billion by 2030: Piyush Goyal
BY AJIT KUMAR JHA
The United States is India’s largest trading partner, with $160 billion in bilateral trade in 2021. The US is India’s largest investor, with a wide range of American companies injecting tens of billions of dollars into the Indian economy, including technology firms like Amazon, Google, Microsoft, IBM, Cisco, and Intel. Delhi had a trade surplus of $28 billion with Washington in 2022-23, a rare record since India usually has a trade deficit with other major trading partners such as China, the UAE, and so on. Commerce and Industry Minister Piyush Goyal has projected that India-US bilateral trade in goods and services will surge to $500-600 billion by 2030. Five million Indian Americans comprising 1.2 percent of the US population form the richest and most educated diaspora in the US.
India is on an ongoing spree, signing FTAs with key trading partners Japan, the UAE, Australia, and others. Yet, it remains a puzzle why there is no attempt to sign a US-India FTA. Delhi was keen to push for a mini-trade deal with Washington. Indian officials failed to convince the US administration during the previous Trump regime as well as the current Biden administration to ink an FTA.
However, beyond the FTA, the future of US-India trade looks very positive given the strong ties between the two largest democracies with the Comprehensive Global Strategic Partnership between Delhi and Washington. India is part of the Quadrilateral Security Dialogue (Quad), a strategic dialogue between the US, India, Australia and Japan, which China attacks as Asia’s NATO.
Moreover, US policy toward India has been one of the few issues on which there is broad agreement between Democrats and Republicans — on both the direction of the bilateral relationship and its importance to the US, says Kenneth Juster, former US ambassador to New Delhi (2017-2021).
The Mini-Trade Deal on the Back Burner The Mini-Trade Deal, put on the back burner, was seen as a first step towards a comprehensive FTA between India and the US. During the negotiations for the Mini-Trade Deal, while India demanded benefits for its exports and greater access to
the US market for its automobile, engineering, and agricultural products, it also sought restoration of the generalised system of preferences (GSP). The US was bargaining for larger Indian market access for agri-and-dairy products, manufacturing and technology-related products, and high-end medical devices.
Asked about the prospects of an FTA between the US and India, Juster replied: “When I first started working on US-India relations in 2001, our bilateral trade in goods and services stood at $19 billion. It is approximately $160 billion today and continues to grow. Yet, given that the US and India are, respectively, the world’s first and fifth largest economies, I feel that we are underperforming. When I was Ambassador, I urged Indian officials to consider negotiating an FTA with America, but I did not get much traction. Indians believed that the FTA had not worked in India’s favour. Delhi has revived its interest in FTAs today. The US, however, for domestic political reasons, is now focusing less on FTAs. So, the likelihood today of a US-India FTA is quite low. Both sides understand that they need to address economic issues in the region, especially because China is trying to dominate the regional economic playing field.”