New York: (Jul 26) The proposed India-US trade agreement will be a big shot in the arm and make India a very attractive location for investors and result in a lot of liberalisation by the country, Chairman of the 16th Finance Commission, Arvind Panagariya, has said.
“A lot of the current things that are underway are very exciting,” Panagariya said during an interaction hosted at the Consulate General of India in New York this week.
“In particular, I want to mention the US-India trade agreement that is being negotiated. Also, the India-European Union agreement,” the eminent economist said.
“The US wants to decouple from China. The US-China trade conflict is here to stay… There has been a long history of this sense within the US that China has operated rather unfairly,” he said while speaking at Ashoka University’s first Annual Growth Conference 2025 in New Delhi.
He added that the trade challenges India faces will become clear over the next three months. Since returning to the office in January, President Donald Trump has aggressively pursued tariffs to recalibrate US trade relationships and secure greater market access for American goods. Although he initially announced reciprocal tariffs on all economies, including India, those measures were later paused.
India is currently negotiating a bilateral trade agreement with the US, which is expected to be concluded by fall 2025.
“India, itself, if it successfully negotiates a trade agreement with the US—which I think also will open a door a little wider to having an agreement with the EU and UK—that will place India in the global trade equation incredibly favourably,” Panagariya said.
The tariff reduction will also put pressure on India to push labour and land reforms to push manufacturing, he added.
Discussing the long-term vision, Panagariya emphasised India’s ambition to achieve “Viksit Bharat by 2047. “This will require us to grow per capita income by about 7.3% annually. While it’s a challenging target, the growth trajectory over the past few decades, despite multiple shocks, provides a strong foundation for optimism,” he said.
