Home / News / World /  India-US trade deal may be put on the back burner

President Joe Biden may not be too keen to immediately pursue the India-US mini-trade deal that was under negotiation, choosing instead to focus on chalking out a China strategy and restoring US credibility in multilateral forums, including the World Trade Organization.

“We will pursue the pending mini-trade deal with the Biden administration. However, we are not sure how interested the new administration will be in the deal," a government official said under condition of anonymity. While India was keen that the Trump administration sign the deal—even after the US elections were announced—the latter apparently did not show interest.

Biden has signalled that signing free trade agreements is not his immediate priority. In an interview with New York Times columnist Thomas Friedman last month, Biden said: “I am not going to enter any new trade agreement with anybody until we have made major investments here at home and in our workers."

At the same, in his inaugural address on Wednesday, he pledged to “engage with the world once again."

The mini-trade deal was expected to cover tariff-related concessions for US farm produce, especially dairy items, pricing of pharmaceutical products such as stents and knee implants, and information and communication technology products. In return, Washington was expected to restore benefits accorded to Indian exporters under the Generalised System of Preferences (GSP).

Both sides were also supposed to remove the tit-for-tat tariff hikes after the US raised steel and aluminium tariffs.

India also hopes to negotiate a free trade agreement with the US in coming days but a lot will also depend on the stand taken by the new US Trade Representative (USTR) Katherine Tai.

In her maiden speech after being selected for the post, Tai said, earlier this month, that the administration will pursue a “worker-centered trade policy", a position that looks close to former President Donald Trump’s ‘America First’ approach.

“What it means in practice is that US trade policy must benefit regular Americans, communities and workers. And that starts with recognizing that people are not just consumers. They are also workers and wage earners," she added.

Biswajit Dhar, professor of economics at Jawaharlal Nehru University said he does not see major changes in the US trade policy toward India in the near term. “The mini-trade deal was actually India’s wish list. The US was cold-shouldering us in any case. It will be more of business as usual between the two sides. Going back on Trump’s ‘America First’ line will not be easy for Biden. If we think restoration of GSP and withdrawal of aluminium and steel tariffs will happen immediately, it is unlikely," he added.

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