India may be first to sign trade deal, says US Treasury Secretary Scott Bessent
India Likely to Be First to Sign Trade Deal with the US, Says Treasury Secretary Scott Bessent
US Treasury Secretary Scott Bessent recently stated that India could become the first country to sign a trade deal with the United States under President Donald Trump’s “reciprocal” tariff policy. This deal aims to prevent the 26% tariff from being imposed, which could take effect in the coming months. Such a move would be a significant step forward in strengthening economic ties between both nations.
Factors Behind the India-US Trade Deal
Bessent mentioned several factors that make India a likely candidate for this deal:
- Lower Tariffs: India’s tariff rates are generally lower than those of other major trade partners, which simplifies negotiations.
- Fewer Trade Barriers: India has fewer non-tariff trade barriers, making it easier to negotiate terms.
- Currency Stability: India avoids practices like currency manipulation, which benefits trade.
- Market Freedom: India operates with minimal government interference, allowing market forces to drive its economy.
These advantages make India an attractive partner compared to other countries, such as China, where negotiations face higher tariffs and more trade barriers.
Goals of the Trade Deal
The proposed trade agreement seeks to significantly boost bilateral trade. The target is to increase trade between India and the US to $500 billion by 2030, up from $190 billion today. Both nations have begun talks, with negotiators meeting in Washington. India’s chief negotiator, Rajesh Agrawal, will soon visit the US to continue discussions. Both sides are eager to finalize the deal quickly to avoid the looming tariff increases.
Strategic Importance of the Deal
This trade agreement holds strategic value for both countries. The US aims to strengthen its economic relationship with India, a key player in the Indo-Pacific region. India, in turn, stands to gain from a more open trade relationship, avoiding the negative effects of potential tariff hikes on its imports from the US.
This deal could also influence global trade by highlighting the US’s move toward bilateral agreements instead of multilateral trade deals, marking a shift in its trade policy.
Looking Ahead
India and the US are on track to finalize the trade deal, with both sides optimistic about the future. If signed, this agreement could serve as a model for future deals with other countries, reshaping the global trade environment.
This potential deal would mark a new chapter in India-US relations, paving the way for more robust economic cooperation in the years ahead.
