bilaterals.org logo
bilaterals.org logo

US-India

The governments of the United States and India have been talking about negotiating a bilateral investment treaty for several years. The idea of a broader trade agreement between the two countries has often been mentioned as a longer term goal.

Bilateral relations between the two powers over the past decades have been complex. During the Cold War, India was non-aligned but friendly with Russia. Since 1991, India took a major turn by adopting neoliberalism as an economic frame for the country’s "development" strategy, and relations with the West subsequently thawed. Starting in 2005, India and the US signed a series of major bilateral cooperation agreements including the areas of defence, agriculture and food security, nuclear technology, energy, education, etc. Many of these initiatives met strong criticism at home in India as they frequently create conditions that benefit global capital and elites at the expense of local communities, especially in the rural areas.

In this process, since 2008, the governments of both countries also committed to signing a bilateral investment treaty, but this is taking some time. In 2014 and 2015, India reviewed its earlier "bilateral investment protection and promotion agreements" (BIPPAs) and decided to draw up a model "bilateral investment treaty" (BIT) to replace those BIPPAs. The Indian model BIT is still under debate but it departs from the US model BIT in several respects. Thus it could be a challenge to come to a common agreed text. But US business associations, which include many major TNCs among their members, are pushing hard to finalise a deal. Civil society organisations both in India and the US have been mobilising against the deal.

In parallel to this, India has been revising its policies on foreign direct investment, notably by opening up the country to foreign investment in multibrand retail (e.g. Walmart or Tesco), and on taxation.

US-India trade, in the meantime, has grown massively, with the US having a huge services trade deficit, much of which reflects the growth of outsourced US jobs to India.

Recommended reading:
 Kavaljit Singh, "The India-US Bilateral Investment Treaty: Not an easy ride", January 2015

Last updated: 21 August 2015
Photo: La Via Campesina


"Not on the table": Piyush Goyal rules out free trade agreement with US
The Biden administration is also not in favour of a free trade agreement that businesses from either side are now talking about.
Indo-US Trade Policy Forum likely to be held in early 2023
The TPF is a premier forum to resolve trade and investment issues between India and the US, focusing on agriculture, investment, innovation (intellectual property rights), services and tariff and non-tariff barriers.
India-US bilateral trade disputes at multilateral IPEF? USTR’s meeting triggers alarm in Delhi
An 11 June meeting called by USTR Katherine Tai discussed ’launching negotiations under trade pillar’, sparking fears among Indian officials that IPEF could end up as a trade agreement.
India wary as US drags labour issues into trade talks
Labour issues may emerge as a tricky area for India in its efforts to further trade ties with the US as the Biden government is keen to make “worker-centric” matters part of the bilateral trade discussions.
USTR visit: India, US to focus on market access, revival of key trade meet
India and the US will likely discuss ways to bolster trade through greater market access — especially in agriculture and information communication technology.
India-US digital trade is going through a bad patch. USTR Tai’s visit can begin fixing it
US Ambassador Katherine Tai will hold talks with India Minister for Trade and Commerce on digital trade.
US, India are set for tough talks as US Trade Representative Tai comes calling this month
Katherine Tai is embarking on her maiden visit to India as US Trade Representative from 22 to 24 November. The two sides will resume the Trade Policy Forum after a gap of four years.
Piyush Goyal urges US firms to push for trade agreement
India’s Commerce Minister Piyush Goyal exhorted U.S. businesses to convince the administration of the need for a trade agreement that would enhance the bilateral flow of goods and services.
US not interested in trade pact: Piyush Goyal
Hopes of an India-U.S. trade pact are off the table for now, with the Joe Biden administration conveying to India that it is not interested in a free trade agreement (FTA), Commerce and Industry Minister Piyush Goyal said.
Make in India key to challenges in trade ties, says US
India has blamed American trade negotiators for the failure to reach an agreement, by constantly changing, and upping, their demands. Recent Indian emphasis on import substitution through a ‘Make in India’ campaign has epitomized the challenges facing the bilateral trade relationship.

    Links


  • US-India Business Alliance
    The US India Business Alliance (USIBA) was incorporated in response to the extraordinary growth of US-India trade and investment, which despite its tremendous growth, pales in comparison to US-China trade