Upcoming India-US trade meet will set agenda for FTA: Nisha Biswal
Nisha Biswal, head of the US-India Business Council, says that the upcoming meeting will set the framework for trade discussions on key areas of cooperation and alignment could create a path towards a Free Trade Agreement (FTA).
Nisha Biswal, a former top US diplomat for India and head of the US-India Business Council, says that the upcoming meeting of the India-US Trade Policy Forum will set the framework for trade discussions on key areas of cooperation and alignment could create a path towards a Free Trade Agreement (FTA).
Nisha Biswal also welcomed India’s willingness to negotiate an FTA. “Let me just welcome the much more positive and forward leaning stance that the Indian government has brought on the issue of free trade as someone who has been talking about the roadmap to an FTA for over a decade,” Biswal said in an interview. “There has never been in the past much of an appetite in India for an FTA certainly not with the United States, there was always a feeling that an FTA was going to disadvantage Indian companies and open up the Indian market too much to the US.”
The trade policy forum, which is the top platform for India-US trade talks, will meet for the first time in four years this week when US trade representative (USTR) Katherine Tai is in New Delhi to meet commerce and industry minister Piyush Goyal and other officials.
Excerpts from the interview:
So what’s going to happen now with Ambassador Tai in India next week?
I believe that this will be the first trade policy forum in about four years. I think there was perhaps one at the very beginning of the Trump administration and then you know, we didn’t have one to do that. So, part of her focus from what I have been told in my conversations with USTR, really is to restart this process and to deepen kind of the institutional relationships and, you know, the frequency and the focus of these gatherings. And that’s a good thing.
Where I would, perhaps challenge both governments and challenge trade representative Tai and minister Goyal is that process is important insofar as it advances goals and outcomes. And so, you’ve got also set some ambitious goals for where you want to go. What are the priority sectors? The Indian government has conveyed that it is open to the desirous of, you know, embarking on a (path) towards a Free Trade Agreement, which I think is a laudable goal and a worthy goal and unnecessary goal.
You don’t appear too optimistic about deliverables and outcomes from this meeting.
I don’t have an expectation. Do I think that both sides could have some important areas of an agreement that they could announce? I think that they could. I think a lot of work has been done over the years to try to come to some set of agreements around price controls on medical devices. A lot of work has been done on certain kinds of ICT (information and communications) tariffs. There are issues that the Indian government has raised that could be discussed, you know, I think, on GSP (Generalized System of Preferences), and, you know, I know that we don’t have an ability to reinstate GSP until Congress actually acts on it. Nonetheless, you know, there can be some conversations had there that would allow for certain understandings. So, I don’t preclude that there could be some things coming out of it. And we would welcome and encourage that. But what I’m saying is I don’t know that this is what either government wants to focus on. I think that what they want to do is get the framework right for how they’re going to take it forward.
But why is a mini-deal not possible now? Can they not just pick up from where the Trump administration left off?
I don’t think that there’s anything that precludes them from being able to get some kind of an outcome, right. A big chunk of the mini-deal hinged upon the restoration of GSP (President Donald Trump terminated India’s GSP benefits in 2019). GSP right now has lapsed as an entire programme has lapsed, right. So, it needs to be reauthorised by Congress. I think minus GSP it probably limits how much or what India is willing to put on the table in terms of what it gets back. So, the parameters of the mini-deal that existed are not currently in existence.
But the more important thing will be for them to say, here are four areas that we know are priorities for our two governments to get right to harmonise and align our approaches and to create some opportunity. I think the digital economy is critically important. How are we going to address kind of the governance elements of a digital economy that is going to become more and more important for both countries. How are we dealing with emerging technology, whether it’s on 5G, whether it’s on AI, on semiconductors? How are we making sure that we are creating collaborative and aligned approaches to some of these areas that are going to shape the future economy for both of our countries and are going to be strategically important in the life sciences space.
We have seen that US and India have been critically important to the world, you know, resolution of the Covid-19 pandemic, and India’s ability to create a vaccine supply chain is going to be really important to how the rest of the world survives and overcomes the pandemic. So, what do we need to address to facilitate that? Right. I think that there are a few areas that the two governments need to come together and say, “This is critically important, and we want to create a process for achieving greater harmonisation, alignment and convergence in these areas. And in so doing, it will create a much clearer path towards an FTA because we will have figured out what it takes for both sides to be able to achieve a more aligned approach that benefits both economies, both industries and workers in both countries.”
You spoke about an FTA. That’s the new thing in the US trade relationship. And apparently, India’s very keen on it. You think it will come up at the meeting?
Well, first of all, let me just welcome the much more positive and forward leaning stance that the Indian government has brought on the issue of free trade as someone who has been talking about the roadmap to an FTA for over a decade. There has never been in the past much of an appetite in India for an FTA certainly not with the United States, there was always a feeling that an FTA was going to disadvantage Indian companies and open up the Indian market too much to the US.
Now, what I think India has understood is if it wants to be globally competitive, strategically and economically. It cannot exist as a silo. You cannot attract supply chains into India to manufacture for the world if you don’t have FTAs with most of the world, because you won’t be able to compete with producers in other countries that have huge FTAs. India does not have trade agreements with most of the major economies in the world. So, if you make in India, where are you exporting to?
I just have one last question. And it is not trade related. It’s about s 400. What do you think is going to happen? You think the Biden’s administration could slap sanctions on India?
I’m not privy to the thinking inside the administration. But I can tell you that we have been very clear and unequivocal that we think imposition of sanctions against one of our closest and most important partners would be counterproductive, would be not in our own national interest, and would get in the way of building and deepening the partnership between our two countries which is more important today than ever. So, we have said that we read that the deployment of the S-400 poses challenges and creates some concerns particularly around advanced US defence technology. And those concerns need to be addressed. But we also think that the US and India should be working behind doors to address those concerns.