Ahead of a meeting with Piyush Goyal last Thursday, US commerce secretary Wilbur Ross has said India needs ”decisive action” for a trade deal with the US. The two countries have been in a trade dispute for many months, the US removing India from the generalised system of preferences (GSP), citing unequal access to the Indian market for US exporters. In retaliation, India has imposed tariffs on 28 US products.
A trade deal between the two nations would be of great benefit to Indian SMEs, particularly given their need for technology and capital. US firms are well-placed to provide this, and would themselves benefit from increased access to China through India, creating a win-win deal.
As the graph above shows, machinery and components are already the second largest US export to India, and a trade deal would enable these flows to grow further.
In July 2018 the US gave India Strategic Trade Authorisation-1 status, while electrical products and equipment trade has not yet increased materially as a result, our forecast is for exports to grow significantly as the US helps to provide India with more advanced technology…