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Indian industry is prepared for any outcome regarding the proposed bilateral trade agreement with the United States, according to Confederation of Indian Industry (CII) President Rajiv Memani, who emphasised that the country's business sector will not pursue deals that compromise national interests.
In an interview with ANI, Memani praised the government's extensive consultation process with industry stakeholders before positioning India in trade negotiations. "The Indian government has given considerable time to understand industry concerns, issues and opportunities. Every industry, every size of industry has been consulted to understand how India should be positioned," he said. The CII President emphasized that there is no compulsion to conclude a deal at any cost. "There is no doubt that India will only do this deal when it is in India's interest and America's interest. Until it is not in the interest of both countries, this deal will not happen. There is no compulsion in this regard," Memani stated. Expressing readiness for either possibilty, Memani outlined the conditions under which industry would support the Free Trade Agreement (FTA). "If you ask industry whether they want this FTA on favourable terms and if we get relatively better terms compared to other countries, then industry desires this FTA," he explained. The potential benefits are significant, particularly regarding tariff reduction. "The 26 per cent tariff that has been imposed will come down and industry will get opportunities to operate there. We will remain more competitive compared to other countries," Memani noted. The CII President also highlighted the broader strategic messaging that an FTA would send: "When two countries have an FTA, it also sends a message that both countries are ready to work together." Memani acknowledged that certain sectors would face difficulties if the trade deal (with US) doesn't materialize, but emphasized industry's commitment to national interests. "It is certain that some sectors and some industries will face difficulties, but industries do not want to work in a way that harms the country. Industry wants to do this in a way that benefits the country," he said. The CII President specifically identified potential competitive challenges, particularly in the automotive sector. "If you look at auto companies, Mexico has a trade deal where tariff is almost 0 per cent. If there's a 25 per cent gap, then Mexico becomes most competitive," he explained. Memani predicted that Mexico would be the primary beneficiary if India fails to secure favorable terms, with some potential gains for Vietnam as well. "The maximum alternative replacement will come from Mexico, with some possibility from Vietnam," he said. The textiles and garments industry could face particular challenges due to Vietnam's existing advantages. "The garments industry could become slightly less competitive because Vietnam has a 20 per cent tariff," Memani observed, highlighting how existing trade relationships could impact Indian competitiveness. Memani cautioned against expecting immediate benefits even if a deal is concluded, describing trade agreements as "a long game." He emphasised that both countries would need to make adjustments to maximize benefits. "Many American companies may also invest in India to export from India. Indian companies will also have to focus on their competitiveness," he noted, suggesting that the government might need to implement reforms and support measures to help industries become more competitive. The CII President's comments reflect a mature approach to international trade negotiations, where industry supports government efforts to secure favorable terms while remaining prepared for alternative scenarios. "Trade deals are two-way. Some things will be good, while some sectors may face challenges," Memani said acknowledging the complex nature of international trade agreements and their varied impacts across different sectors of the economy. (ANI)
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