India Approaches Completion of Extensive Trade Agreement with the US
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Synopsis
India is nearing the finalization of a Bilateral Trade Agreement with the US, which aims to facilitate zero-duty imports and boost trade to $500 billion by 2030. Key sectors include defence and clean energy, with India remaining resilient amid global challenges.
Key Takeaways
- India is close to finalizing a BTA with the US.
- Expected trade growth to $500 billion by 2030.
- Zero-duty imports under PLI schemes.
- India benefits from demographic advantages.
- Moderate tariffs enhance trade appeal.
Mumbai, April 21 (NationPress) India is nearing the final stages of an extensive Bilateral Trade Agreement (BTA) with the United States, anticipated to enable zero-duty imports under the production-linked incentive (PLI) schemes and significantly enhance bilateral trade, with a target of reaching $500 billion by 2030, as per a report released on Monday.
As US Vice President J.D. Vance arrived in India with his family, the report further indicated that the BTA will also pave the way for high-end US technology imports in sectors such as defence, clean energy, and advanced manufacturing.
In light of global challenges, India’s consumption-driven economy, demographic advantages, and relatively minimal export dependency provide it with a favorable outlook, according to the report by Asit C. Mehta Investment Intermediates Ltd (ACMIIL), part of the Pantomath Group.
With merchandise exports to the US representing only 2.1 percent of India’s GDP, the country remains less susceptible to external shocks compared to other export-centric economies.
The report emphasizes India's opportunity to capitalize on supply chain diversification, particularly as the US enforces steep tariffs on Chinese imports.
“India’s 26 percent reciprocal tariff is relatively moderate, enhancing its attractiveness as a manufacturing and trading ally,” the report stated.
India's economic resilience is highlighted by robust macroeconomic fundamentals, with a projected GDP growth of 6.5 percent for FY26 and a commitment to fiscal discipline, as the fiscal deficit is expected to decrease to 4.9 percent in FY25.
The Reserve Bank of India has adopted a more accommodative monetary policy, with expected repo rate reductions likely to encourage private investments.
As per the report, a significant structural advantage is India's demographics - 51 percent of the population is under 40, which drives consumption, with Gen Z and millennials becoming the primary consumers.
On the market front, technical and valuation metrics suggest a stabilizing trend, creating favorable conditions for medium- to long-term equity performance.
The government's supportive policies, including the ‘Make in India’ initiative and a focus on enhancing the ease of doing business, continue to bolster various sectors, the report observed.
