The relaunched US-India Trade Policy Forum

During an official visit to the US from January 9-11 by an Indian delegation, headed by Minister of Economy, Trade and Industry Shri Piyush Goyal, a scheduled meeting of the US-India Trade Policy Forum (TPF) was held in Washington DC.

It is also sometimes referred to as “Strategic Dialogue” since, within the framework of this Forum, the relevant representatives of both countries have repeatedly made noteworthy statements regarding both bilateral relations and the situation in the Indo-Pacific region. The main goals of this platform set up for discussing a wide range of issues of US-Indian relations can be found here.

As is noted in this document, it was formed back in 2005 and 13 meetings have already been held (including the latest one). It should be mentioned that a four-year break in the work of the TPF was taken from 2017 to 2021. It seems that it is no coincidence that this platform was relaunched (in November 2021) during the collapse of Sino-Indian relations, unprecedented in decades, as a result of the well-known incident that occurred in the summer of 2020 in Ladakh.

Following the results of the previous TPF meeting, a Joint Statement consisting of 28 clauses was adopted. Clauses 4 and 15 are noteworthy. In clause 4, the then head of the American delegation, US Trade Representative Katherine Tai “welcomed” the Indian government’s measures to provide guarantees for foreign direct investment and a significant simplification of the procedure for their introduction into the Indian economy. In clause 15, the Indian side expressed its desire to participate in the American branch of the United Nations Conference on Trade and Development (UNCTAD)

In the course of talks held in April 2022 between Katherine Tai and the Indian Foreign Minister Subrahmanyam Jaishankar, who was on a visit to Washington at that time, both sides highlighted the importance of resuming the work of the TPF. The scheduled 13th meeting was to be held a year after the 12th, that is, in November 2022. But it was postponed due to the tense domestic political situation in both countries in connection with the election cycle. In the US, these were the midterm elections; in India, there was an inter-party struggle in connection with the election of new parliaments in several states.

It follows that the officially declared reason for postponing the “calendar” date of the next TPF meeting by two months seems quite reasonable. And yet, one cannot help but pay attention to the fact that it took place a month after another Sino-Indian border incident in the Tawang district. Like Ladakh, this zone is the subject of territorial disputes between both India and China.

It should be noted that Shri Piyush Goyal, who headed the Indian delegation at the last two meetings of the TPF is a very significant figure in the leadership of India today. In addition to the above, he holds several more positions in the current government. He is the Leader of the Upper House of Parliament (Council of States) and one of the coordinators of the ruling party bloc, National Democratic Alliance (NDA), which is center-right and led by the Bharatiya Janata Party.

During his current trip to the United States, Shri Piyush Goyal held talks with Katherine Tai and Secretary of Commerce Gina Raimondo. In New York, Mr. Goyal and members of his delegation talked to prominent representatives of American businesses and US think-tanks.

In the new Joint Statement, which has 28 clauses as well, adopted by both sides this time around, several points are noteworthy. First and foremost, both sides are happy with the activities of the working groups formed a year earlier in various areas of bilateral trade and economic cooperation, and with the general state of the latter. Nevertheless, it is pointed out that even the current volume of trade in goods and services (which is at the level of $160 billion annually) falls far short of the capabilities of both countries.

One can see a noticeable lagging behind in this indicator in terms of trade with India by China and the EU, whose trade volume with the Republic of India is in the range of $120 and $90 billion, respectively. Moreover, in trade with the former, India has a steady and constantly increasing deficit, which is already at the level of about 80% of the total volume.

Clause 4 expresses the satisfaction of the American side with India’s participation in the Indo-Pacific Economic Framework for Prosperity (IPEF), the creation of which was recently discussed in NEO. Let us note the obviously anti-Chinese goal-setting in Washington’s launching of this initiative. However, the number of such initiatives is constantly increasing, and the desire of the US leadership to involve India in them seems no less obvious.

 However, among the abundance of various topics covered in this document (including, for example, the problem of preserving sea turtle populations in the process of fishing), it was not possible to find any traces of the intention of both sides to solve perhaps the main problem in bilateral economic relations – the absence of free trade. Commentators attribute this (outwardly strange) circumstance to the wary attitude of the US leadership (regardless of party affiliation) in general to this format in foreign trade. That is why the world’s largest economy is not among the participants in configurations such as CPTTP or RCEP.

The above-mentioned fact is the main reason for the generally skeptical assessments given to the TPF Forum, as well as the results of its latest meeting. Indeed, the presence of this Forum in the US-India system of relations is unlikely to have any noticeable effect on the generally quite positive state of its trade and economic components.

Which does not mean that there is no reason to pay attention to the above-mentioned fact. But its significance is due not so much to the economic sphere as to the political situation in the Indo-Pacific region. One of the main aspects is due to the positioning of India in the Indo-Pacific region. This is the reason for the growing attempts by Washington (in concert with London) to win over New Delhi in the fight against Beijing for influence in the region.

As part of these attempts, there are facts of the formation by the US leadership of other (both multilateral with the participation of India, and purely American-Indian) forum initiatives. In this regard, the holding in mid-January (i.e. immediately after the TPF meeting) of the 6th India-US Forum (Antony Blinken participated in it remotely) stands out. US Assistant Secretary of State for South and Central Asian Affairs Donald Lu embarked on an official visit to New Delhi in order to participate in the Forum.

Donald Lu, along with Katherine Tai, is also of Chinese origin and works in the current US administration. It seems that ethnic Chinese and Indians, as they say, “coexist” quite peacefully there, unlike their ancestral homelands. In particular, the reaction in China to the latest meeting of the TPF Forum can be defined as skeptical and cautious. An article on this subject in the Global Times is accompanied by a very expressive illustration.

Finally, one must mention that, despite the obvious signs of a certain “bias” of India’s foreign policy as a whole towards Washington (and its regional allies, primarily Japan and Australia), New Delhi retains its traditionally rather neutral position in the international political arena. This is evidenced not only by India’s refusal to join the anti-Russian actions that Washington has recently taken, but also by rationally restrained behavior in conflicting situations that arise in relations with China.

Vladimir Terekhov, expert on issues of the Asia-Pacific region, exclusively for the online magazine “New Eastern Outlook.


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