The accord, when it materialises, could turn the economies of both countries on its head. Even a limited trade deal can both the markets of both countries.
As countries continue to distance themselves from the clutches of China the prospect of an India-US trade deal seems to be looking sweeter with each passing day.
The accord, when it materializes, has the potential to turn the economic activity in both countries on its head. It has been sometime in the making given that two years of intense negotiations have been invested into it. India, Asia's third-largest economic powerhouse, is now primed to step into an elevated position of influence given its very positive economic report card despite fighting the pandemic nationally.
The fact that important inter-ministerial groups that include finance, commerce & industry and the ministry of external affairs are driving these talks forward with Washington indicates the materialization of a comprehensive plan and therein lies the true import of this agreement for India.
Indian commerce, business and trade is now replete with success stories which reflects the innovative nature and resilience of the government and the collaboration extended by the business community. No stone is being left unturned to try and regain the economic success which slid a few rungs down the ladder thanks to the debilitating effects of the pandemic.
The US and India both stand to gain from this pact given the vast market opportunities that will be at their disposal. Indian Commerce Minister Piyush Goyal has evinced optimism that a consensus will be reached and this should send a wave of optimism across the markets. Instances of US companies already investing in Indian entities are being recorded with each passing week and the Indian markets are amplifying this optimism.
According to Goyal 'a couple of calls' should pave the way for a quick trade deal, smoothen out pending issues that have built up over the years and then orchestrate a mutually agreed momentum.
One of the biggest pluses for India, should an agreement be reached, would be the restoration of India's special-trade status, which allows it duty-free access to US markets and to scores of products. The facility of 'special-trade' status had been withdrawn by US President Donald Trump due to allegedly high tariffs being levied by New Delhi despite drastic reductions of the same by Indian authorities.
Even a limited trade deal carries a positive signal to both markets as it helps India to try and resolve separate discussions on opening specific markets and address issues like US visas, Indian agriculture products and automotives.
A broader agreement, however, should be the call of the day given that there is much to talk about on precision manufacturing, financial services, infrastructure development and open market access.
For Trump, the decision to reach a trade agreement could win him the support of an influential diaspora in the upcoming presidential elections, while India's allergy towards China, and its efforts to curb its influence internally while at the same time replacing Beijing's exports to the US, has become a national issue.
In the longer term, India has made it clear it has far bigger ambitions for its trade relations with the US. The time has now come for Indian authorities to prepare for a bigger push in achieving its economic goals with the US, EU and the UK. The signs appear to be optimistic as it would throw open the gates of limitless possibilities. The extent of India's ambitions is far greater than the finer points that will be signed off on trade deal agreements. The time has come to quit fruitless engagements and focus on re-energising strategies that offer scope for greater success for all parties concerned.