Best chance for bilateral trade agreement between India-US: USIBC on Trump tariffs

President Donald Trump’s announcement to levy reciprocal tariffs on about 60 countries offers India and the United States the best opportunity to try concluding a meaningful bilateral trade agreement, the head of the US-India Business Council said on Apr.2.

In a major trade policy shift, Trump, 78, announced from the Rose Garden of the White House that he will impose a 10 percent tariff on goods imports from all countries and levy reciprocal tariffs on about 60 nations on a case-by-case basis, depending on the nature of trade barriers that nation has placed on American goods and the size of US deficits.

“From my perspective and the perspective of USIBC, this is the best opportunity that India and the United States have had in several years to try to conclude a meaningful bilateral trade agreement,” USIBC president Atul Keshap said in an exclusive interview soon after Trump announced his reciprocal tariff.

Keshap, who has just returned from India, said that it was clear in meetings last week in Delhi that the two negotiators are working very seriously and with great ambition to try to conclude a meaningful agreement. Such an agreement would be good for both countries.

“Prime Minister Modi and President Trump have talked about hitting a goal of US$500 billion in bilateral trade and investment between our two countries. We need to get that done. It is long overdue to have a bilateral trade agreement between the United States and India, and I’m hoping very much that both governments will work with focus and purpose to get that done this year,” Keshap said.

Keshap said the most important part should be that they enable the business communities in both directions to invest and to trade in goods and services in ways that they can achieve that goal of US$500 billion as quickly as possible. “What we need is a trade agreement that is enabling, that is the key word, and if it enables both sides, I think the US and India can actually have an enormous amount of upside potential if the deal is structured right,” he said.

Responding to a question, Keshap said the message from the White House Wednesday afternoon was that America is clearly focused on trade.

“For a few years, we really didn’t have any meaningful trade engagements. We haven’t concluded a major trade negotiation in many years. Now you have a government led from the top that is very focused on trade and is also focused on enabling more trade with its key partners and allies. And that includes India. India, frankly, is further ahead on a meaningful trade negotiation than almost any other country. We are applauding from the perspective of the business chambers, we want to see it happen,” Keshap said.

As the two countries began talks on a bilateral trade agreement, Keshap advocated for a level playing field for US companies in India.

“We want for each other a level playing field. We want the same treatment for American companies in India, that Indian companies get in America. We want ease of doing business, speed of doing business, swift resolution of any disputes, which is why a trade agreement creates a frame that is enabling for our businesses,” he said.

“We just want to be treated fairly so that we can invest, we can employ, we can pay taxes, we can innovate, we can research for the happiness and well-being of the American and Indian people,” Keshap said.

For the first time in many years, he noted, India and the United States are in a serious bilateral trade discussion. “There will be some public posturing, and there’ll be a lot of private conversation. What’s really important is that we have a shared strategic confidence in one another. We have a People-to-People relationship that is a safety buffer in our relationship,” he said.

“We have an increasing technological convergence and innovation convergence that invests both of us in each other’s success. So, in the middle of the negotiation, there’s a little bit of public stuff, but really what’s key is that India is a QUAD partner. It’s an important friend and partner of the United States. Our business communities are converging. I don’t think we have any choice but to try to conclude, or rather to seize the opportunity, to include a meaningful bilateral trade agreement. This is the first and best opportunity in many years, and we have to seize it,” he noted.

Keshap called for creating a very clear set of investment rules for our companies from both sides.

“That will create a framework that hasn’t previously existed, and it will create transparency that is good for business and will be good for creating even more connection between our two countries,” he said. “We ought to have some sort of framework that continues to fuel our services economy, collaboration,” he said.

“You have services economy, digital economy powerhouses. We have the same let’s figure out a framework for ensuring that all of that continues to grow. It’s very profitable. It generates a lot of jobs in both countries. It generates a lot of tax revenue for both governments. We want to keep that goose laying the golden eggs,” he added.

“On goods and on, agriculture and all of that, I think we have to be mindful of each other’s political sensitivities, political compulsions. We’re both very diverse, very layered democracies. We have political compulsions. If we can be solicitous of each other’s perspectives, I think we can come to some good agreements. President Trump is focused on tariffs. Let us see how we can actually energize the bilateral trade in goods so that it complements the enormous growth in the bilateral trade on services,” Keshap said.