Biden seen stepping up economic, defence ties with India

Amiti Sen New Delhi | Updated on January 20, 2021

(From right) US President-elect Joe Biden, his wife Jill Biden, Vice President-elect Kamala Harris and her husband Doug Emhoff arrive for the inauguration of Biden, in Washington, on Wednesday   -  REUTERS

As Joe Biden takes charge as the 46th US President following a hard-fought election against Donald Trump, India may look forward to greater stability and predictability in bilateral ties, both on the trade and diplomatic fronts, say trade experts and policy-makers.

Most, however, concede that it may be futile to expect too many concessions too soon, as the US economy continues to fight a slowdown intensified by the Covid-19 and rising job losses.

“Biden is expected to create a more stable and predictable policy regime that will be good for global trade as well as for India. On bilateral issues such the withdrawn GSP (Generalised System of Preferences) benefits and the tension around trade deficit, we may see some positive movement,” said Ajay Sahai of the Federation of Indian Export Organisations.

“There might be some positive movement on India’s demand that the GSP scheme be reintroduced. The approach on the trade deficit may also become more positive as Democrats have anyway not been so severe about it,” he added. The more benign approach towards India may, however, not immediately translate into movement on a free trade agreement (FTA) .

“India is not in a position to meet the US’ demands on labour and environment standards. Moreover, Biden himself has said that he is not going to look at any FTA till he has restored the competitiveness of American workers,” a Delhi-based US policy expert said.

Amid high unemployment levels in the US, there might be political pressure not to ease H-1B visa norms, said Arun Singh, former Indian Ambassador to the US.

The Biden administration is likely to expand defence cooperation and look at opportunities to increase economic ties, Singh said.

In the January-November 2020 period, India’s exports to the US declined more than that of China’s, while Vietnam’s rose, pointed out Arpita Mukherjee from ICRIER. “Our aim should be to increase out export share to the US by taking a number of steps including addressing trade barriers,” she said.

Published on January 20, 2021

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