US trade deal to place India in favourable position in global trade equation: Panagariya

NEW DELHI: India will come out stronger from the ongoing tariff uncertainty and a bilateral trade deal with the US will place the country “incredibly favourably” in global trading equation, 16th Finance Commission Chairman Arvind Panagariya said on Friday. He said the trade restrictions by the US on China, Vietnam, and Cambodia will place India in a favourable position in the context of global trade.“The US clearly wants to decouple from China. US-China trade conflict is here to stay… There has been a long history of this sense within the United States that China has operated rather unfairly,” he said, adding that the challenges that India will face on the trade front will become clear in the next three months.

“India, itself, if it actually successfully negotiates a trade agreement with the United States, which I think also will open a door little wider to having an agreement with the European Union and United Kingdom, that will place India in global trade equation incredibly favourably,” Panagariya said.

India is negotiating a bilateral trade agreement with the United States, which is expected to be finalised by fall 2025.

US President Donald Trump on April 2 triggered an uncertainty in global trade by imposing reciprocal tariffs on countries with which a trade imbalance. On April 9, Trump announced a 90-day pause on the reciprocal tariffs.

Panagariya said there will also be pressure on India to push labour and land reforms to push manufacturing.