Proposed talks on free trade agreement (FTA) between New Delhi and Washington is set to gather steam in the coming months as the QUAD or the Quadrilateral group, which held its much awaited meeting on Friday, indicated that the focus of the member countries — India, US, Japan and Australia will encompass economic co-operation besides strengthening security ties. Sources said that US, which is keen to reduce its dependence on China in the post Covid 19 pandemic era, will also be looking at the trade agreement.
While New Delhi and Washington had already initiated discussions on such an agreement under former US President Donald Trump, there was apprehension among policymakers that the momentum would be lost under President Joe Biden. However, sources said that the Biden administration has not deviated much on US’ China policy and now with the strengthening of the QUAD, talks on the proposed trade agreement is likely to resume soon.
“We are set to resume talks (on the FTA) soon, there is no reason to believe that the proposal has been put in cold storage,” a senior government official said, on condition of anonymity.
At present, China is US’ largest trading partner.
“China is US’ largest supplier of goods and amid the Covid 19 pandemic, it may not be possible for Washington to alter trade dynamics significantly but surely it will look at diversifying and reduce its dependence on China. The gap will have to be filled up by India and for this a trade agreement will be the way forward,” Ajay Sahai, director general, Federation of Indian Export Organisation told India Narrative.
According to the Office of the United States Trade Representative (USTR), US is the largest goods importer in the world. The US’ total import stood at $2.5 trillion in 2019. China is US’ top supplier of goods. It accounts for 18 per cent of total goods imports, the USTR noted.
Sources said as the world gears up for a post Covid 19 era, India’s role in the new supply chain network will increase as many countries and companies seek to diversify their risks. “Co-operation of the QUAD will be based on this basic framework,” one of the sources said. Swadeshi Jagran Manch’s (SJM) national co-convenor Ashwani Mahajan, however, said India must not rush into trade deals.
“There have been thorny trade related issues with the US and we must not undermine those. We welcome the Quad co-operation but we need to wait and watch before we get into the economic and trade co-operation at this juncture,” Mahajan said.
Meanwhile the strengthening of the QUAD has made China worried. “India, a leading un-aligned nation neighboring China, has seen increasing attention from the US-led anti-China clan. Under the framework of the so-called Indo-Pacific strategy, the countries have been playing up various topics with an aim widely interpreted as containing the development of China, from economic, technology to defense ability growth,” the Chinese state backed Global Times wrote.
It also noted that the US and India have seen more frequent exchanges lately, especially when it comes to the stunt of "countering China's rise."
“As the world is shifting into post-pandemic era, with global industrial chains seeing adjustment, timely finding a beneficial position for India while avoid taking sides between China and the US, will be a test for the wisdom of the Modi administration,” it said.
