On Thursday, US Commerce Secretary Gina Raimondo expressed her hope that the Indo-Pacific Economic Framework (IPEF) would be more economically beneficial than the Free Trade Agreement (FTA) with India.
IPEF was launched in Tokyo on May 23 in collaboration with the United States and other partner countries in the Indo-Pacific region. IPEF’s 14 partners account for 40 percent of global GDP and 28 percent of global trade in goods and services.
The framework is built around four pillars related to trade, supply chain, clean economy and fair economy (issues such as tax and anti-corruption). India has ditched the trade pillar and decided to join the other three entities related to supply chain, clean economy and fair economy.
Gina Raimondo said that a trade deal with India is not currently on the table and that the US Congress has no appetite for a free trade agreement.
“My hope is that the IPEF… I believe it will be more economically viable than the FTA,” he said in a fireside television interview here.
He said the framework would be a modern equivalent of a trade agreement.
“That’s what we’re trying to figure out through IPEF, and if we do it right,” it will help create more jobs in both countries than traditional FTAs.
Asked about cooperation in the semiconductor sector, the US Commerce Secretary said that India and the US would formally discuss the sector.
“I am working very closely with my colleague (Minister of Commerce and Industry Piyush Goyal). Tomorrow we have the official meetings of the CEO Forum and the trade dialogue, we talked about a lot about semiconductors and we will have a formal discussion. around the conductors,” he said.
There are synergies between India and the US in semiconductor design and technology, he added.
Raimondo said the U.S. and the world are too dependent on Taiwan for semiconductors, and “we want to work closely with our allies, including India” in that area.
He also said that both countries have great opportunities to increase trade and investment.
India has a stable business environment, and that will benefit American companies looking to diversify their supply chains, he said.
Because of the difficulties in India, he said India has a “very high” tariff on certain components that go into semiconductors or other electronic items.
He said U.S. investors are concerned about complex foreign investment rules in certain sectors and differences in state-level regulations.
“But the truth is, you can always increase transparency and reduce bureaucracy and regulations. This will pave the way for more commerce,” he added.
Raimondo is here for India-US Business Dialogue and India-US CEO Forum.
The India-US Commercial Dialogue and CEO Forum will be held on March 10 to discuss cooperation in various sectors that will open up new trade and investment opportunities between the two countries, the commerce ministry said.
The dialogue is a joint initiative involving regular government-to-government meetings held alongside private sector meetings to facilitate trade and maximize investment opportunities across a wide range of economic sectors.
Featured image of the day
Nirmala Sitharaman, the US Treasury Secretary met in Bengaluru ahead of the G20 meeting