India-US bilateral trade pact likely by year-end: NITI Aayog's Arvind Virmani

New Delhi [India] March 28 (ANI): Bilateral trade between India and the US is likely to be signed by the end of the year, said Arvind Virmani, Member Niti Aayog, while releasing the government think tank's 'Trade Watch July -September 12 FY25' report.
The report added that geopolitical shifts are increasingly shaping the global trade landscape, and tariffs are now the main factor dictating trade patterns. Tariffs may offer short-term relief, but they raise costs, distort resource allocation, and weaken long-term competitiveness across countries.
History shows that tariff wars have led to higher consumer prices and economic stagnation rather than protecting domestic industries. The economic strategy will involve a detailed analysis of the Reciprocal Tariff Plan's impact on India, which will bring both challenges and opportunities.
In response to rising geopolitical tensions and trade wars, Western countries are increasingly shifting their supply chains to politically aligned nations, a strategy now referred to as 'friendshoring'.
The World Trade Organisation (WTO) has observed a growing fragmentation in global trade, especially between the US and China, as countries seek to prioritize trade within their geopolitical blocs.
The report added that while this shift disrupts traditional trade patterns, it creates new opportunities for emerging economies like India, particularly in sectors such as pharmaceuticals, IT services, and manufacturing.
However, increasing competition from Vietnam, Mexico, and Poland, along with stringent labour and environmental regulations, requires India to enhance its ease of doing business effectively.
The expansion of BRICS (Brazil, Russia, India, China, and South Africa) to include energy-rich nations like Saudi Arabia, the UAE, Egypt, Iran, and Argentina in 2024 will present both challenges and opportunities for India.
Deeper trade ties within BRICS can enhance economic cooperation, but India's trade balance with China remains a concern. Ensuring balanced benefits for all members will require carefully structured internal trade policies, particularly in sectors where China holds a dominant position.
Africa's rapid economic growth, bolstered by increasing trade liberalization efforts such as the African Continental Free Trade Area (AfCFTA), has made the continent a key focus for global trade partnerships.
The African Continental Free Trade Area (AfCFTA), which aims to eliminate tariffs and trade barriers, is gaining momentum. It will create one of the world's largest free trade areas with a combined GDP of over USD 3.4 trillion. Africa's total consumer and business spending is projected to surpass USD 6.7 trillion by 2030.
India has the potential to strengthen its presence in major global trade regions as it currently accounts for only 8 per cent of its trade in regions that make up 77 per cent of world trade, presenting opportunities for growth in high-value markets. (ANI)