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Trade talks between India and the US are progressing toward a deal.
A successful agreement could significantly boost Indian exports.
India aims to increase bilateral trade with the US to $500 billion by 2030.
New Delhi:
As trade talks between India and the United States are at an advanced stage, a monthly report by India’s finance ministry has said that a successful deal will give a significant boost to exports, while also widening US market access for Indian goods.
The economic forecast said that a successful trade pact will turn the current headwinds into tailwinds. India, along with several other nations, have faced uncertainty over Donald Trump’s decision to impose punitive tariffs on goods being exported to the US. President Trump has called it a fair and reciprocal act, however, his announcement led the global economy and international markets facing severe turbulence.
“A successful US-India trade agreement could flip current headwinds into tailwinds, opening up new market access and energising exports,” the monthly economic review said, while speaking about the possible trade deal with the US.
With an annual export turnover of $129 billion in 2024, the United States is India’s largest trading partner. The two countries are now negotiating a trade deal with an aim to boost bilateral trade to $500 billion by 2030. At $45.7 billion, the surplus balance of trade is currently in India’s favour.
But this year, the first quarter trade had been hit after Donald Trump’s 26 per cent reciprocal tariffs announcement. However, due to domestic factors, President Trump had announced a 90-day pause on these tariffs. New Delhi and Washington now aim to firm up the deal within this window.
India’s trade minister Piyush Goyal and a delegation of top negotiators were in Washington last week to give a boost to the ongoing trade talks. Both sides are aiming for a likely deal by early July, however, Mr Goyal has made it clear that New Delhi will not rush into a deal, and would finalise a pact only after New Delhi’s interests are secured.
Last monthm Mr Goyal had said that “We will always put India first and will ensure that a deal is finalised keeping that sentiment in mind.” He had added that “time constraints” may only be seen a motivating factor. “Favourable time constraints motivate us for quicker talks, but till the time we are not able to secure the interest of our country and our people, we do not hurry (into any deal),” he had said.
Meanwhile, India’s finance ministry said that the government’s direct tax exemptions, fiscal measures, and recent rate cuts from the central bank could accelerate the recovery and lift growth towards the upper end of forecasts of 6.3 per cent to 6.8 per cent in the current fiscal year.
The economic review stated that capital spending has been playing a “pivotal role” in supporting economic activity. This has also protected India’s economy and help absorb global shocks like wars, sanctions on India’s trading partners, and punitive taxes. Relaxing of personal income tax slabs have also encouraged savings, while also boosting spends.
With the valuation of the Rupee remaining stable and foreign exchange reserves remaining on the high side, India, the report said, has the potential to remain one of the top global destinations for investment.
