Towards A Free Trade Agreement: On India-U.S. Ties

By jyoti July 9, 2019 14:05

Mark Lescott, a former Assistant U.S. Trade Agreement Representative for South and Central Asian Affairs, expressed his views on the impact of the trade dispute on strategic partnership between India and US

Important Analysis

  • In the last two months, the U.S. has withdrawn from India preferential tariff benefits under its Generalized System of Preferences (GSP) program, and India has imposed retaliatory tariffs in response to tariffs that the U.S. applied last year on steel and aluminum.
  • India US trade issues have ranged from trade in jute and almonds in the period of the General Agreement on Tariffs and Trade to poultry and solar panels under the World Trade Organization (WTO).

Impact of the trade dispute

Mark Lescott argue that conflict and disputes are not new to the U.S.-India relationship. But this moment is different because the conflict may run deeper with more serious implications.

  • Trade war: He warns that If the two fail to relieve the building tension, a tit-for-tat trade war mimicking that between the U.S. and China may follow.
  • The U.S. is India’s single most important export market; India is a huge and growing market for U.S. investment and exports. 
  • An escalating series of retaliation and counter-retaliation could undermine efforts to advance what might be the most consequential bilateral relationship in the 21st century.
  • Strategic partnerships: Trade turmoil between US and India has put the U.S.’s strategic partnership with India at risk
    • Neither country has been particularly successful at negotiating free trade agreements compared to others around the world — the EU just concluded one with Vietnam.
    •  Each has a strong but messy democracy with many voices against free trade agreements. 
    • Each is a tough negotiator with a passionate commitment to its national interests. But both can dream big together and trade should be central to those dreams.

Resolving differences

  • A starting point would be to empower the Office of the U.S. Trade Representative and the Ministry of Commerce and Industry to develop some problem-solving cooperative efforts under the existing Trade Policy Forum on issues such as digital trade, regulatory coherence, and intellectual property rights, matching their earlier successes on the WTO Trade Facilitation Agreement.
  •  India Should create a new career trade staff that reports directly to the Prime Minister’s Office.
    • The U.S. administration has experienced trade staff, even at senior levels, who build negotiating skills over their careers and relationships of rapport and trust with their foreign counterparts. India could better serve its trade interests with the same kind of approach.


  • U.S.-India strategic partnership should focus more on trade. 
    • The goal should be a more comprehensive platform for expanding trade and investment through the progressive elimination of trade and investment barriers, from protectionist regulatory measures to tariffs and restrictions on trade in services.
    • This may lead to the negotiation of a free trade agreement, which is the ultimate example of economic integration in a trade relationship.


Also Read: President Trump Promises A ‘Very Big Trade Deal With India’

India To Lose Preferential Trade Terms With U.S.

By jyoti July 9, 2019 14:05