Goyal says India-US trade deal will show farmers’ interests are protected

New Delhi: Commerce and industry minister Piyush Goyal on Thursday expressed confidence that the details of the India-US trade deal, when made public, would show that India had safeguarded the sensitive interests of farmers and other stakeholders while securing a strong comparative advantage.

India's trade agreements went beyond tariff reductions, rules of origin and market access, encompassing services, investments, education, skill development, technology partnerships and cooperation on climate goals, Goyal said at the fourth National Conference on India's Industrial Transformation, organised by the Institute for Studies in Industrial Development (ISID) and the Industrial Development Research Association (IDRA).

He said nine free trade and bilateral trade agreements concluded by the government had opened preferential market opportunities in economies with a combined gross domestic product (GDP) of $60 trillion, compared with $10 trillion covered by agreements concluded before 2014.

Goyal also defended the government's decision to withdraw from the China-backed Regional Comprehensive Economic Partnership (RCEP), saying that joining the free trade bloc would have sounded the death knell for India's manufacturing ambitions.

"Otherwise, we would have been a nation of salesmen and salesgirls marketing Chinese goods in India," Goyal said, referring to India's withdrawal from RCEP negotiations on 4 November 2019, in Bangkok.

The minister argued that the agreement, which brought together China, Japan, South Korea, Australia, New Zealand and the 10 ASEAN countries, would have effectively opened India's domestic market to Chinese products without adequate tariff protection.

He said the earlier agreements were largely with countries competing with India, while the current approach sought to foster complementary economic relationships. India’s trade agreements aimed to create opportunities for both sides, with India exporting products its partners needed and importing goods required for its own development, he said, describing such arrangements as win-win partnerships.

Goyal said trade was fundamentally about comparative advantage and competitiveness rather than absolute numbers alone. He observed that several developed countries had structured their tariff schedules to impose high duties on labour-intensive goods, using them as negotiating instruments.

India’s trade negotiations also sought to protect sensitive sectors and facilitate access to high-technology products, including graphics processing units (GPUs), memory technology and medical technology required for the country’s development. The agreements were being negotiated after extensive stakeholder consultations to safeguard India’s sensitivities and interests, he said.

Goyal identified quality, global market access, economies of scale and inclusivity as the four key factors that would drive India’s industrial transformation. Reiterating Prime Minister Narendra Modi’s emphasis on “Zero Defect, Zero Effect”, he said Indian manufacturers must focus on quality and use opportunities created by trade agreements to expand their global presence.

India’s domestic market of 1.4 billion people, combined with access to international markets, could help manufacturers achieve economies of scale, affordable production and competitive costs, he said.

The minister highlighted growing international recognition of Indian talent and skills. Recalling a conversation with Germany’s foreign minister regarding the immigration agreement between the two countries, Goyal said he had been told that Germany needed substantially more Indian talent than the 90,000 Indians required annually under the arrangement.

He cited Indian professionals in senior positions at Fortune 500 companies and their contributions to cutting-edge technologies as evidence of the capabilities of the country’s workforce. Goyal expressed confidence that India would remain the world’s fastest-growing major economy for another 20-25 years, attributing this prospect to the talent, skills and energy of its people.

On climate action, Goyal said global efforts should be guided by the principles of polluter pays and common but differentiated responsibilities, with adequate financial and technological support for developing countries. He said 60% of India’s installed electricity capacity came from green and renewable sources, while coal remained essential for energy security and affordable power.

The minister said the Make in India initiative and phased manufacturing programmes across sectors had helped bring factories to India and increase domestic production. India had moved from being predominantly a buyer of products manufactured elsewhere to becoming a country increasingly recognised for manufacturing, he said.

Goyal stressed that innovation would be central to industrial transformation, requiring collaboration among government, private enterprises, academia and research institutions. The government should primarily act as a facilitator and catalyst for private-sector-led innovation, he said, highlighting the research capabilities of IITs, engineering colleges and other institutions.

Referring to the Startup Fund of Funds, Goyal said the first fund had been fully utilised and the second fund was in place. He also highlighted the Research, Development and Innovation Fund as part of efforts to strengthen India’s innovation ecosystem, which he said had made the country home to the world’s third-largest startup ecosystem.

Goyal said India’s space economy, valued at $8.4 billion, had the potential to reach $44 billion by 2033. He added that international partners were increasingly interested in collaborating with India in space, artificial intelligence, computing and startups.

Referring to his recent visit to Germany, the minister said research institutions there had expressed interest in working with India. He attributed the growing interest to confidence in the partnership between the two countries and in India’s talent, skills and commitment to fair play and equal opportunity.

Goyal said international partnerships could create opportunities for joint research, technology development and industrial collaboration, combining domestic capabilities with international expertise and investment. He called for coordinated efforts among government, industry, academia and research institutions to achieve the vision of Viksit Bharat 2047.