The Morning Brief
US-India BTA: One Deal to Rule them All, One Deal to Bind Them?
Apr 18, 2025
Bipin Sapra, a Tax Partner and global trade expert at EY India, delves into the ambitious US-India bilateral trade deal, targeting a staggering $500 billion in trade by 2030. He navigates the complexities of negotiations amid tariffs that could shake up export dynamics. Topics include potential gains for sectors like electronics and agriculture, the implications for India's manufacturing strengths, and how this deal could strategically disrupt China's market dominance. It's a compelling discussion on the future of global trade.
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Quick takeaways
- The proposed US-India bilateral trade agreement aims to boost trade volume to $500 billion by 2030, but faces challenges from high tariffs and non-tariff barriers.
- This agreement could strategically counter China's trade dominance while enhancing collaboration between India and the US in the Indo-Pacific Economic Framework.
Deep dives
Significance of the Bilateral Trade Agreement
The proposed bilateral trade agreement between the US and India is set to significantly increase trade volume from $129 billion in 2024 to $500 billion by 2030. This agreement is critical for India as nearly 18% of its export basket relies on trade with the US, which could be jeopardized by high tariffs imposed by either country. The current trade surplus of $46 billion in favor of India could be at risk if American tariffs and trade barriers lead to decreased demand for Indian products. Moreover, the impact extends beyond exports, as reduced trade could hinder India's manufacturing growth and deter foreign direct investment from the US.
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