Hopes of an India-U.S. trade pact are off the table for now, with the Joe Biden administration conveying to India that it is not interested in a free trade agreement (FTA), Commerce and Industry Minister Piyush Goyal said on Thursday.
The minister also said that India has begun working on an FTA with Bangladesh, and is close to sealing an early harvest deal with Australia ‘which has almost agreed’ on the matter, with a similar deal being worked out with the U.K..
“The US, as of now, has kind of indicated that they are not looking for new trade agreements, but we will look at working with them on market access issues on both sides,” Mr. Goyal said in an interaction with exporters, adding that even resolution of these issues will boost outbound trade to the U.S..
Resolving issues like non-tariff barriers, entering mutual recognition agreements and aligning on higher quality international standards, will help spur trade between the two countries, the minister said.
“Australia is first on the list, UK, then the UAE, and if the UAE happens, the pact with GCC will also be expedited. We have already started the dialogue with the UAE and one more country from the Middle East,” said Mr. Goyal on the FTAs currently on the government’s priority list, which also includes Israel.
While talks with Canada got waylaid amid the COVID-19 pandemic, the ministers said the dialogue is expected to pick after Canadian elections conclude in the next few months. The EU, he said, had agreed to restart renegotiations after abandoning earlier talks in 2013, purely on the basis of Prime Minister Narendra Modi’s ‘goodwill’. However, given that there are 27 countries involved, he said one shouldn’t expect a pact to happen ‘very quickly’.
Assuring industry that the government won’t repeat ‘mistakes of some past FTAs’ and reminding them about the government’s ‘unexpected’ decision to walk out of the RCEP based on their feedback along with that from farmers and the people at large, Mr. Goyal also urged exporters to appreciate that FTAs cannot be ‘one-way traffic’.
“We also have to open our markets to others if we are wanting a larger pie in their markets. Therefore, my appeal to all of you is to also identify areas where we have confidence that we can withstand competition,” he said.
“If we make the decisions without your concurrence, that is also harmful… On our engagement with other countries on FTAs, we will be very sensitive to your demands, but you should also be sensitive that trade is a two-way affair,” he underlined.