August 1st is the deadline for US tariffs – officially “reciprocal”, but arguably punitive – to kick in. India and the United States do not yet have a trade deal. The vibrant, often contentious, dance between Washington and New Delhi continues, played out on the world stage under the spotlight of trade. While both nations rhetorically champion a deeper, more strategic economic partnership, the reality on the ground is far more complex, a tapestry woven with shared ambitions, persistent anxieties over tariffs, and a growing sense of urgency in a world grappling with geopolitical instability.

For India, the United States represents a crucial market, a vital source of foreign investment, and a key technological partner. For the US, India offers a massive, rapidly growing consumer base, a strategically partner in the Indo-Pacific, and a potential bulwark against China's increasing economic dominance. This mutual recognition of strategic importance, however, does not automatically translate into frictionless trade relations. The uncertain outcome of the current trade talks between the two countries reflects this.

The trajectory of India-US trade has been largely positive. Bilateral trade in goods and services has witnessed significant growth in recent years, propelled by India's burgeoning tech sector, rising disposable incomes and the US's demand for skilled labour and innovative solutions. However, the absence of a comprehensive trade agreement continues to cast a shadow, leaving significant potential untapped and creating fertile ground for simmering disputes.

Recent efforts to address specific issues have yielded some progress. The resolution of long-standing disputes at the World Trade Organization (WTO) regarding agricultural products and certain steel and aluminium tariffs is a welcome sign. The increased focus on cooperation in emerging technologies like artificial intelligence, quantum computing and semiconductors holds immense promise for future growth. The two countries’ "Initiative on Critical and Emerging Technology (ICET)" aims to foster collaboration in these critical areas, recognizing their strategic importance for both nations.

Despite these positive developments, several critical hurdles remain, preventing the relationship from reaching its full potential. These concerns are felt on both sides,........

© Mathrubhumi English