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A comprehensive India-US trade agreement can transform India's growth trajectory, unleash competition and help the country realise its Viksit Bharat ambitions, economist and author Surjit Bhalla has said, cautioning that continued delays in clinching such a pact would ultimately benefit China.
In an interview with ANI, Bhalla said the absence of a trade agreement with the United States was one of the biggest policy failures of the past three decades and attributed it to resistance from entrenched interests within India's policymaking system. "There is only one policy in my view... a major trade deal with the US. That will unleash animal spirits... and make us an important player in the global stage. Until we are an important player in the global stage, we're not going to achieve any of our ambitions" Bhalla said. According to Bhalla, an India-US trade agreement goes far beyond trade balances. "The trade deal with the US is not just about trade surplus. It is about markets, technology, etc." He noted that India already enjoys one of its largest trade surpluses with the United States. "If you take the trade surplus with the US and compare it to the aggregate trade surplus of Japan, the EU and the UK, it's four times. One is about 70 billion and the other is about 15 billion." Bhalla questioned why negotiations have remained inconclusive despite long discussions. "We've been talking about a trade deal with the US for 30 years... I think one needs to really examine why it hasn't happened. And I think it's very much the deep state." He argued that greater competition resulting from such a deal would challenge incumbent businesses that currently benefit from a protected domestic market. "If you have a trade deal with the US, everybody will agree that we will become a lot more competitive... Then the major firms in India will not be so comfortable anymore. They will have competition." Bhalla also linked the stalled agreement to wider geopolitical implications. "There is one country that really benefits from the lack of a trade deal between India and US and that's China." Calling for greater transparency in policymaking, he said India needed an open debate over the winners and losers from major economic decisions. "We should be able to have an open conversation of who benefits, who loses, from which actions. That we don't have." Asked what advice he would offer Prime Minister Narendra Modi if he were to return to an advisory role, Bhalla was unequivocal. "Trade deal with the US, 100%. Without thinking." He said such an agreement would have effects extending well beyond commerce. "It will unleash competition, unleash the competitive urge. It will remove comfort. It will remove complacency." Bhalla added that agreements with other major economies can not substitute that with Washington. "The UK trade deal doesn't do any of that. The Japanese trade deal doesn't do any of that. The EU trade deal doesn't do anything of that." Bhalla reiterated that India must look beyond its domestic market if it wants to become a developed economy by 2047. (ANI)
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