GS-2 Bilateral ties with other nations, Effects of Policies on India’s Interest.

Post India’s structural reforms the bilateral relationship between India-US has deepened and strengthened exponentially. India’s trade relationship with the US is underscored by trade-surplus on India’s part, which is to the dislike of the US. consequently many trade obstacles cropped up but with the revival of India us trade policy forum a much needed space for negotiation is expected by both countries, to enhance bilateral trade.

The US seeks an expanded trade relationship with India that is reciprocal and fair. There are certain issues which stand in the way of realization of these objectives-

  • Market access restriction

  • High tariffs

  • Unpredictable regulatory requirement

  • Restrictive trade measures

  • Withdrawal of exemption from generalized system of preferences.

As both countries are willing to make progress in such issues, the relaunch of the Trade policy forum(TPF) can be seen not only marked with opportunities but also as the first such initiatives under the Biden administration.

In the light of the recent 12th ministerial level meeting of the India-US TPF, Many breakthroughs have been appreciated to establish a strong and resilient bilateral trade between the two countries.

India-US TPF has 5 focus groups

  1. Agriculture

  2. Investment

  3. Innovation and creativity

  4. Services 

  5. Tariff and non tariff barrier

Measures to improve the business ecosystem

  • Two way services trade has started and FDI caps have been raised which has resulted in increase in bilateral FDI.

  • India took initiatives of various economic reforms such as-

  1. FDI in the insurance sector has been liberalized.

  2. Retrospective provision in income tax has been eliminated.

  3. “Single Window System” has been launched to facilitate investment.

  •  A resilient and secure supply chain is to be created in critical sectors of trade and technology.

  • In order to promote growth in the digital sphere, which is estimated to be worth 100 Billion dollars trade. Some foundational issues have begun to be sorted like digital service tax, cross border data flows and common cellular standard.

  •  In the field of cyberspace India-US should come together for 5G,6G and Artificial intelligence

  • In the field of health sector there is a need for US-INDIA to cooperate and provide a global health architecture.

  • To enhance the investment in Research and development the government needs to adopt market based approaches on innovative medical products.


A robust India-us trade and economic partnership can address global challenges while working in collaboration Their constructive engagement in the multilateral trade bodies like WTO,G20 and OECD will enhance the bilateral trade relationship. The coming together of two democratic in the trade front is required to assert the establishment of a rule based global trading system among market economics, also in the Indian context market oriented reforms should continue to be implemented through transparent means, which will decrease trade tension with the US. 

Download plutus ias daily current affairs 26 November 2021

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