Walking together: But India and US need a trade deal to cement ties

The second India-US 2+2 dialogue between the foreign and defence principals of the two countries has moved defence cooperation forward. The two sides discussed ways to advance maritime security by working together for a free, open and inclusive Indo-Pacific – code for balancing China’s aggressive muscle flexing in the region. Enhanced military exercises – such as the first ever tri-services Tiger Triumph and the Industrial Security Annex agreement that promotes defence collaboration between private sectors – elevate the strategic partnership. But the latter’s potential cannot be realised as long as the Indian private sector’s role in defence remains extremely limited. On maritime issues, India will now also cooperate with the US Centcom and Africa Command whereas it had previously mainly dealt with the US Indo-Pacific Command.

All of this is welcome and shows that New Delhi and Washington are on the same page as far as global strategic worldview is concerned. But the missing link in their relationship is trade. Ever since the Donald Trump administration started raising protectionist barriers under his America First policy, the India-US trade relationship has hit choppy waters. Earlier this year, the US suspended preferential tariffs to $5.6 billion of Indian exports after it concluded that India wasn’t providing equitable access to its own markets.

True, New Delhi too hasn’t helped its cause with its own protectionist turn on trade. For the India-US relationship to be truly strong and durable, it must be underpinned by a comprehensive trade deal. Given India’s low level of competitiveness, adherence to global norms and focus on internal issues, it can hardly be an economic threat to the US remotely comparable to China, so Washington should cut it some slack. Likewise, New Delhi needs to reform its economy and open it up, for its own good. To make the India-US relationship the defining partnership of the century, a comprehensive trade deal must be expedited.

This piece appeared as an editorial opinion in the print edition of The Times of India.

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