USA–India FTA: Trade and Strategic Considerations

Siddhartha K. Rastogi

Published: September 2021

Free Trade Agreements have gained momentum in a world with a flailing multilateral system of negotiations. The increased might of China has also pushed the global North including the EU and the USA to fall back on increasing direct trade linkages with the global South to counterbalance Chinese comparative advantages. India has emerged as the main contender for considering FTAs, particularly to counterbalance China. India also needs these FTAs for strategic reasons, such as growth, technology transfer and for geostrategic purposes. India and the USA have a broad agreement on the need for a FTA; however, some points of divergence remain. For the USA, stricter protection of intellectual property rights and more freedom for US tech firms are the major demands. India, on the other hand, is firm on more regulation for e-commerce firms and local data storage rules and demands greater access to US agricultural markets. While both countries have strategic reasons to become a closer trade partner, domestic lobbies or perceptions of national interest hold back the negotiators of both sides.