New Delhi [India], October 5 : Negotiations on the India-US trade agreement have reached a “plateau” where further concessions from either side could be difficult, Union Finance Minister Nirmala Sitharaman said, indicating that the remaining discussions may hinge on finding limited room for compromise.
“The agreement negotiations are still ongoing, although we'd like to believe that both the sides have reached a plateau beyond which giving or taking might be very, very difficult. But maybe if there are rooms to operate from, both sides would do it,” Sitharaman said at the Munich Leaders Meeting.
She said the agreement was still being “hard and very rigorously negotiated”, while highlighting the trade imbalance as a key feature of India-US economic relations.
“But what is the predominant feature of the trade relations between India and the US? The trade balance is very much in our favor,” Sitharaman said. She added that the US would naturally want to reduce the imbalance, with Washington seeking to address what it sees as losses accumulated over the years.
Sitharaman said the nature of global trade negotiations was also changing, with countries increasingly seeking to address trade imbalances through measures beyond conventional negotiations. “Negotiation used to be the only platform through which countries could highlight the discrepancies, highlight the lop-sidedness and say, would we want to correct this?” she said.
“Tariff was an instrument of negotiation, and tariff had a certain framework within which you will apply it. Today framework is there, tariffs are going,” she said, while stressing that countries still need to negotiate and find “some give and take”.
On the India-EU trade agreement, Sitharaman described it as a major example of India's approach to negotiating trade pacts while protecting domestic interests. She said India had opened 92.5 per cent of its tariff lines and around 97 per cent of tariff value, while the EU had opened 99 per cent in value terms and possibly 97 per cent of tariff lines.
She said the agreement could support employment in labour-intensive sectors such as footwear, textiles, toys and processed products, many of which are linked to micro and small enterprises.
“Those are all in the micro and small medium industry segment, which are labor-intensive,” Sitharaman said, adding that greater access to the European market could generate “more exports, more jobs”.
Sitharaman also said bilateral trade agreements were gaining importance as multilateral institutions have weakened, although “multilateralism is not going to go away and multilateralism shouldn't go away”.
The Munich Leaders Meeting being held in the National Capital provides a platform for about 100 senior decision-makers and experts to discuss opportunities for stronger cooperation among emerging and middle powers in a time of profound geopolitical change—including geoeconomic developments, trade and connectivity, maritime security, defense cooperation, and other key international challenges.