Ashley J Tellis, a prominent strategic thinker and TATA Chair for Strategic Affairs at Carnegie Endowment for International Peace, has emphasized the need for India to expand its ambitions and consider a Free Trade Agreement (FTA) with the United States.

Speaking about recent developments in trade policy, Tellis noted that India has undergone a significant shift in its approach to trade agreements under Prime Minister Narendra Modi. Initially sceptical of FTAs, Modi's administration now recognizes the importance of expanding global trade relationships to sustain long-term economic growth.

The U.S., being one of India's top trading partners, is viewed as a critical ally in this endeavour.

Tellis expressed optimism about U.S. President Donald Trump's decision to enforce a 90-day pause on wide-ranging tariffs, reducing reciprocal tariffs on India and other negotiating countries to 10%.

He described this pause as an "interval of opportunity," allowing both nations to focus on resolving trade disputes and strengthening complementary areas of cooperation. However, tariffs on China were increased to 145%, signalling a differentiated approach by the U.S. administration.

Regarding the Global Trade Research Initiative's (GTRI) suggestion that India should avoid a comprehensive FTA with the U.S., Tellis argued that India should aim higher and pursue a genuine FTA despite challenges posed by vast developmental gaps between the two nations. He acknowledged that such an agreement would require significant time and effort but stressed its potential benefits for both economies. Additionally, he supported the idea of limited "Zero-to-Zero" tariff deals on 90% of industrial goods, describing these arrangements as ideal for fostering deeper economic integration among friendly nations.

The GTRI had recommended avoiding comprehensive FTAs due to potential harmful trade-offs for India, advocating instead for limited tariff agreements similar to those proposed by Europe for the U.S.. Meanwhile, Union Commerce and Industry Minister Piyush Goyal announced earlier this year that the first tranche of a Bilateral Trade Agreement (BTA) with the U.S. is expected to be concluded by fall 2025.

Tellis' remarks underscore the strategic importance of deepening economic ties between India and the U.S., not only for mutual economic benefits but also for broader geopolitical objectives. Enhanced trade relations could serve as a cornerstone for achieving India's great power ambitions while bolstering U.S. interests in maintaining its global primacy.

ANI