By Disha Rawal
India-US trade has touched $140 billion in 2017, growing from the $118 billion in 2016, according to the US India Strategic and Partnership Forum (USISPF). These unofficial figures indicate the increasing quantum of economic interaction between the two countries. India is one of the ten largest trading partners of the US, and the US has a significant trade deficit with India.
However, USISPF suggests that due to India’s aeroplane and energy transactions with the US, a large part of this will be corrected. Thus, we can expect more balanced trade in the coming future.
The strategy to the trade
As China extends its influence following the One Belt One Road initiative and bolsters it trade and geopolitical leverage, US and India’s political and economic objectives are now more aligned than ever before. Analysts suggest that this can provide a major boost to India-US trade. However, there are questions being raised about the H-1B visa review, even as it is said that India will be one of the biggest beneficiaries, considering the skill pool it can offer to the American economy. Moreover, Modi’s reform agenda finds great support and appreciation in the US, which may also drive up economic interaction in the near future.
A Free Trade Agreement between India-US?
According to Ambassador Ken Juster, both countries may soon be looking at a Free Trade Agreement, even as he emphasised that the US wishes to aid India’s ‘Make in India’ initiative and it’s fighting against terrorism. This may especially be important in view of the increased import tariffs brought in by the Budget 2018, which is being seen as a protectionist move.
However, before there can exist an FTA, both countries need to resolve the crucial disagreements on intellectual property and trade regulations among others. India has constantly pointed out to how the US has engaged in unfair trade in the past, and India’s exports have been turned down by the US many times on the basis of regulatory issues. Both parties will need to reach solutions to these headline problems to supplement their bilateral trade.
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