Bilateral Trade Deals and India's Strategic Agreements

Bilateral trade deals often involve extensive negotiations and concessions, aiming to create mutually beneficial agreements. Recently, India has made significant advancements with Free Trade Agreements (FTAs) with the European Union (EU) and the United States (US), connecting some of the world's largest economies.

Key Features of India's FTAs

• India's Stance:
  • Protecting vulnerable sectors such as agriculture, dairy, and SMEs.
  • Advancing a market-driven economy through reforms in governance and market infrastructure.
• Differences between EU and US FTAs:
  • CBAM (Carbon Border Adjustment Mechanism) issues present in EU negotiations but not in US discussions.
  • Varied perspectives on labor mobility.

EU FTA Highlights

• India achieves unprecedented market access, covering over 99% of Indian exports to the EU by trade value.
• Facilitates the "Make in India" initiative through high-value service commitments and a mobility framework for skilled professionals.

US Trade Deal Insights

• The US agreement is influenced by geopolitical dynamics and follows India's deals with the EU and UK.
• Despite an 18% tariff, India's exports have shown resilience, registering a 4.3% growth.
• Potential savings of up to $3 billion on import bills by substituting Russian crude with Venezuelan crude.
• Opens a $118 billion market for textiles and apparels, and removes the 25% penalty on Russian oil imports.

Similarities and Trade Benefits

• Both deals protect India’s agri and dairy imports while reducing tariffs on US industrial goods and agricultural products.
• Tariff reductions expected in future BTA negotiations.

Economic Projections

• Potential for significant GDP growth by capturing market shares in chemicals and apparel exports.
• Strategic purchases of $500 billion in US energy, technology, and other sectors to diversify imports.

Conclusion

The FTAs with the EU and US signify a transformative phase in India's trade approach, positioning consumers at the forefront and engaging with global stakeholders at India's pace. These agreements are anticipated to be a springboard for economic growth and diversification.