“We can look at a trillion dollar trade target over the next 10 years,” Piyush Goyal said at the U.S. India Strategic Partnership Forum
India’s Commerce Minister Piyush Goyal on Wednesday exhorted U.S. businesses to convince the administration of the need for a trade agreement that would enhance the bilateral flow of goods and services.
“We already have an FTA (free trade agreement) with Japan; we are working on an early harvest agreement as part of FTA talks with Australia,” Mr. Goyal told the U.S. India Strategic Partnership Forum (USISPF). “I would urge all of you to impress upon your administration as well that India is ready and willing to expand our economic partnership in the spirit of reciprocity and equality.”
The minister’s remarks assume significance as they come a month after he told Indian exporters that the US has indicated the India-US FTA is off the table ‘as of now’. “But we will look at working with them on market access issues on both sides,” Mr. Goyal had said in August.
“While our trade in goods and services has grown significantly in the last ten years, I believe the potential hasn’t been tapped fully yet. I think India and US can look at a balanced, mutual trade of about a trillion dollars in the next ten years and unless we keep some very ambitious targets, we will never get there,” he asserted in response to a query from USISPF board member George R. Oliver, who is the chairman and CEO of Johnson Controls.
“I am happy to look at a trillion-dollar target for India-US trade and happy to engage with the US and look for signing a economic partnership with the US so that all four members of the Quad will have very strong economic ties with each other,” the minister said.
On whether India feared being left out of global trade once it walked out of the Regional Comprehensive Economic Partnership (RCEP), Mr Goyal said India had engaged with partner countries on the RCEP for almost seven-eight years.
“I was made the trade minister in 2019 and left with just three-four months before the final round of discussions that were to culminate in an announcement on the RCEP on November 4 (2019). But I am very much used to getting into micro details when it comes to these subjects,” he recalled.
“When I started digging into the entire discussion, dialogue and the agreement that was sought to be finalised, I realised that India was being short-changed and it would have proved to be a tremendous disadvantage vis-à-vis some countries and we would have effectively killed India’s manufacturing sector,” Mr Goyal noted, emphasising that ‘it’s very difficult to understand what could go wrong if you are working with an opaque system at the other end’.
Despite India’s abstention from the RCEP, the country is sealing several regional and bilateral economic partnerships that should hold it in good stead and make US investors interested in partnering Indian businesses.
“We already have an ASEAN-India FTA, where ten South East Asian countries are covered. With Japan and Korea, we have an FTA. With Australia, before the end of the year or by January and February, we will have a framework for an FTA with an early harvest to be implemented by May or June. We have signed an FTA with Mauritius. We have our SAFTA arrangement,” he listed out.
“So, in some sense, we are well set, and we do believe that where there are equal and reciprocal, honest partners, we will be there to partner. As we speak, we have launched negotiations with the UAE. We are already in dialogue with the UK at an advanced stage and will launch negotiations formally for an advanced and comprehensive trade partnership from November,” the minister pointed out.
The European Union and India have also decided to restart start discussions on a comprehensive economic partnership agreement, the minister said. “India is working with like-minded countries, democracies, transparent rules-based eocnomies and therefore, I think we will neither be left out but will actually be at an advantageous position also for US companies to come and work with us in India,” he concluded.
Highlighting that the COVID-19 pandemic has exposed the fact that supply chains should not just be based on cost of manufacturing, but also on trust, Mr Goyal said that future generations will hold ‘us responsible’ if India and the US don’t work together as two large democracies to ensure the well-being of the world at large.
“The US and India are natural allies. No two economies can have the kind of synergy, brotherhood, understanding of each other, and also the respect for rule of law, democratic traditions, concern for the lesser privileged, interest to engage with technology and innovation, as well as promote entrepreneurship, like the US and India do,” he averred.