By Sanskriti Global Exports by Himanshu Gupta

The Marathon Negotiation: What Piyush Goyal's 'But' in the India-US Trade Deal Means for Your Business

Introduction

In the high-stakes world of international trade, every word from a Commerce Minister is scrutinized. When Union Minister Piyush Goyal recently commented that talks on the much-anticipated India-US Bilateral Trade Agreement (BTA) are “going on very well, but…,” he offered a perfect encapsulation of the relationship itself: brimming with potential, yet fraught with complexity. For the Indian import-export community, this statement is more than just a diplomatic update; it’s a crucial signal to temper excitement with strategic patience. The US is India’s largest trading partner, yet the absence of a comprehensive free trade agreement (FTA) means significant untapped potential remains. This article will dissect the minister's cautious optimism, explore the underlying realities of the negotiation, and, most importantly, analyze the tangible implications for Indian traders navigating this evolving landscape.

Decoding the Minister's Message: A Factual Summary

Speaking to the press, Minister Goyal confirmed that high-level discussions between New Delhi and Washington D.C. are active and progressing smoothly. His positive framing underscores the mutual desire to deepen what is already a formidable economic partnership, valued at over $191 billion in 2022. The geopolitical undertones are undeniable; as global supply chains pivot away from China, both nations see immense strategic value in a stronger, more integrated trade relationship under frameworks like the Indo-Pacific Economic Framework for Prosperity (IPEF).

However, the crucial addendum to his statement—that “sensitive issues take time”—is where the real story lies for businesses. This is diplomatic language for significant, long-standing points of contention that have historically stalled negotiations. These are not minor details but foundational disagreements rooted in domestic economic priorities and protectionist sentiments on both sides. While the specific details of the current talks are confidential, the well-known friction points likely include:

• Market Access for Agriculture: The US has consistently pushed for reduced tariffs and greater market access for its agricultural products, particularly dairy, poultry, and certain grains. This is a highly sensitive sector for India due to its large agrarian population and domestic political considerations.
• Intellectual Property Rights (IPR): Washington advocates for a stronger IPR regime, especially concerning pharmaceuticals and digital content. India, often dubbed the 'pharmacy of the world,' has historically balanced innovator rights with the need for affordable access to medicines, leading to differing perspectives on patent law.
• Non-Tariff Barriers: Beyond tariffs, the negotiations are tackling a web of non-tariff barriers. This includes divergent standards, complex certification processes, and sanitary and phytosanitary (SPS) measures. For example, the US has stringent standards for medical devices, which can be a hurdle for Indian exporters.
• Digital Trade and Data Localisation: As digital trade explodes, so do disagreements over data. India's push for data localisation—requiring companies to store Indian user data within the country's borders—is a point of concern for US tech giants who advocate for the free flow of data across borders.
• Restoration of GSP Benefits: From India's perspective, a key demand is the restoration of its benefits under the US Generalized System of Preferences (GSP), which were revoked in 2019. This program allowed duty-free entry for thousands of Indian products and its reinstatement is a major priority.

Goyal’s statement, therefore, isn’t a sign of a breakdown but a realistic assessment. He is managing expectations, signalling that while the political will is present, untangling these complex knots requires meticulous and patient negotiation. The goal is not a quick, superficial agreement but a “fair, equitable, and balanced” deal, and achieving that balance is a marathon, not a sprint.

Implications for Indian Import-Export Professionals

While the final text of a BTA is distant, the direction of the talks and the known sticking points have immediate strategic implications. Here’s what you should be monitoring and preparing for:

• Opportunity Sectors on High Alert: A potential BTA would be a massive boon for sectors where India has a competitive advantage but faces significant US tariffs. Exporters in textiles and apparel, gems and jewellery, engineering goods, automotive components, and chemicals should be actively tracking developments. A tariff reduction could make their products significantly more competitive overnight, creating a surge in demand.
• Increased Competition in Sensitive Sectors: Conversely, importers and domestic manufacturers in sectors like dairy, poultry, and certain high-tech medical devices must prepare for increased competition. A deal will inevitably involve India conceding some market access. Domestic producers in these areas should focus now on enhancing efficiency, quality, and branding to compete with potentially cheaper US imports.
• The Compliance Imperative: A comprehensive trade deal is never just about tariffs. It will likely involve significant alignment on standards and regulations. Exporters, particularly in pharmaceuticals and food products, should anticipate a potential raising of the bar on SPS measures and technical barriers to trade (TBT). Proactively upgrading quality control, certification, and documentation to meet stringent US standards is no longer just good practice—it's a strategic necessity.
• Rethinking Supply Chain Strategy: The broader 'friend-shoring' and 'de-risking' narrative is a powerful tailwind. A formal BTA would cement India’s role as a key node in a reconfigured global supply chain. Businesses should position themselves as reliable, high-quality alternatives to Chinese manufacturing. This means investing in capacity, technology, and transparent supply chain management to attract American firms looking to diversify their sourcing.
• Navigating the Digital Domain: For service exporters and the tech industry, the outcome of negotiations on digital trade is paramount. The final rules on data flows, data localisation, and intellectual property for digital products will define the operating environment for years to come. Businesses in this space must stay informed and advocate for policies that enable seamless cross-border service delivery.

Conclusion: Prepare for the Long Haul

Minister Piyush Goyal's message is one of pragmatic optimism. The journey towards a comprehensive India-US trade agreement is firmly underway, but the road is long and requires navigating a minefield of sensitive domestic interests on both sides. For the Indian import-export professional, the key takeaway is not to wait for the ink to dry on a final agreement. The time to act is now.

The prudent strategy is to prepare for a future of deeper integration by enhancing competitiveness, elevating quality and compliance standards to global benchmarks, and strategically aligning with the macro trend of supply chain diversification. While the diplomats negotiate the text of the treaty, the real winners will be the businesses that proactively build the resilience, quality, and agility to capitalize on the opportunities the moment they arise. The “but” in the Minister’s statement is not a stop sign; it is a signal to prepare with diligence and strategic foresight.

Source: Original