India-US trade deal ‘more or less’ finalised

Mumbai: The India-US trade deal is nearly finalized, with Commerce Secretary Rajesh Agrawal confirming that both nations are working on a framework for preferential market access before signing it. Agrawal stated that they aim to sign the agreement at a suitable time. Both countries need to ensure preferential market access, as India follows most-favoured-nation (MFN) tariffs while the US utilizes executive tariffs, creating differentials and preferential access for India.

Businesses from both sides are actively engaged and satisfied with the understanding reached between the governments.

Other trade negotiations, such as the India-Chile free trade agreement, are nearing completion, with discussions ongoing in some areas. Agrawal expressed optimism about finalizing the agreement within the next two to three months. Additionally, India is hoping to implement the India-New Zealand FTA soon, potentially by October.

Addressing concerns over freight costs affecting exporters, Agrawal informed that the government is collaborating with exporters to secure shipping and container access, thereby minimizing cargo delays and expenses. Exports have surged by over 15% in the first four months, indicating that the impact of higher freight costs has been less severe than anticipated.

Agrawal emphasized the potential for India to expand its fintech services globally, especially in the Global South, leveraging India's expertise in digital payments, lending, insurance, and trade finance. He highlighted that reducing the average cost of remittances for Indian migrant workers from 5-6% to 3% could inject an additional USD 5 billion into their hands, while a similar reduction globally could benefit over 30 billion USD for the global migrant population.

Lastly, Agrawal mentioned that India has signed nine trade agreements over the past five years, with a combined GDP of USD 60 trillion, and 23 countries have signed Memorandums of Understanding (MoUs) for cooperation on digital public infrastructure. He believes that participating even at a 10% level in these trade opportunities could lead to a significant USD 8-60 to 80 billion expansion for India's fintech services exports.