New Delhi: India and the US need to take their economic and trade relationship as seriously as the strategic ties between them, especially with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) coming in, said Nisha Biswal, president of the US-India Business Council (USIBC).
The TPP (Trans-Pacific Partnership), officially known as the CPTPP, was signed by 11 countries including Australia, Canada, Chile, Japan and New Zealand in 2018. The US was initially part of the deal, but former president Donald Trump walked out of it in 2017, and the name of the mega trade pact was changed to CPTPP.
While the pact was originally designed to counter China’s growing economic heft, in September, China expressed its intentions to join the CPTPP.
In an interview to ThePrint, Biswal, who is also senior vice-president for international strategy at the US Chamber of Commerce, said India and the US need to set a “more ambitious agenda” for two-way trade when Commerce and Industry Minister Piyush Goyal meets his American counterpart, US Trade Representative Katherine Tai, later this year for the India-US Trade Policy Forum.
“We cannot have a trade agreement in the Indo-Pacific — TPP — that excludes the two largest economies of the Indo-Pacific, the bookends of the Indo-Pacific, the United States and India. So, I think we need to work on our bilateral and our regional agreements and I am hopeful,” said Biswal, who also served as US assistant secretary of state for south and central Asian affairs under former president Barack Obama.
“The one piece of this important relationship that has not been as robust as the others is the economic partnership and the trade relationship… It is long past time for the US and India to get serious about a trade relationship,” she added.
Modi put focus on trade on US visit
According to Biswal, during Prime Minister Narendra Modi’s visit to the US in September, he put a “real focus and ambition” on advancing that economic partnership to a deeper trade relationship. However, she noted, the chances of the Joe Biden administration initiating talks for a mini trade deal, negotiations for which began under Trump, looks difficult.
“I think the small trade agreement which we spent four years of the Trump administration trying to carry across the finishing line is not necessarily the starting point for the Biden administration with Prime Minister Modi,” she said.
“I think the PM has a bigger goal in mind. I think the Biden administration has not been as focused on trade, and we need to really find the ways and the incentives that bring trade into a much sharper focus.”
Biswal also noted the mini trade deal “shows a proof of concept” that the US and India can negotiate on items and can conclude a deal.
“If we can get both sides to just bless the agreement that had already been put in place tentatively and make it final, formal and official, I think that would be fantastic. I haven’t heard the inklings from either government that was their focus. But from a business community perspective, we are all in support of that,” she said.
‘India-US trade policy forum is important’
The US and India are expected to hold their maiden trade policy forum (TPF) under the Biden administration later this year, and according to Biswal, it is an important place for leaders of both countries to come together.
“I think the TPF is an important place to start, when our trade leaders come together and meet later this year, hopefully to set a more ambitious goal of what can be achieved. I think that will be something we will all be looking closely at,” she said.
“It is an important time for India to stake its claim and its place as a global leader on the economic side of things as well … Supply chains are complicated, they are global. And when you have a lot of restrictions on how much of the content has to be India-based and by what time, all of these things inhibit investment decisions because they are complicated and add a lot of complexity.”
The USIBC chief also highlighted that due to India’s absence from free trade agreements, companies find it difficult to have market access in other countries through India.
“India right now is not part of many free trade agreements, so India is not an export destination for many companies to make in India for the export market. For India to create an export-oriented economy, it needs to have more of those bilateral and regional trade agreements that allow for that market access into other economies,” said Biswal.
“Therefore, what is driving investments into India is access to the Indian market. India needs to create a level playing field for investors coming in,” she added.
The USIBC is also organising its annual general meeting — India Ideas Summit — on 6 and 7 October virtually, which will be addressed by US Deputy Secretary of State Wendy Sherman, and India’s External Affairs Minister S. Jaishankar, Commerce Minister Goyal and Foreign Secretary Harsh Vardhan Shringla.
(Edited by Rachel John)