Economist and author Surjit Bhalla has asserted that a comprehensive India-US trade deal could reshape India's economic growth trajectory, while warning that further delays would hand an advantage to China. In an interview with ANI, Bhalla described the absence of such a pact as one of India's biggest policy shortcomings over the past three decades.
The Significance of a Comprehensive Trade Deal
According to Bhalla, the India-US trade deal extends well beyond trade balances. "It is about markets, technology, etc.," he said, according to the ANI interview. Bhalla argued that the agreement would increase competition in the domestic market by exposing established Indian companies to stronger global rivals, reducing the advantages they currently enjoy in a relatively protected environment. "If you have a trade deal with the US, everybody will agree that we will become a lot more competitive... Then the major firms in India will not be so comfortable anymore. They will have competition," Bhalla stated.
Delay Benefits China: Bhalla's Warning
Bhalla highlighted the geopolitical dimension of the trade deal impasse. "There is one country that really benefits from the lack of a trade deal between India and US and that's China," he said. He stressed that the prolonged delay has broader consequences beyond economics. Bhalla called for greater transparency in economic policymaking, saying there should be a more open discussion on the impact of major policy decisions and who stands to gain or lose from them.
Critique of India's Policy Establishment
Bhalla attributed the failure to finalize the trade deal to resistance from what he termed the "deep state" within India's policymaking apparatus. "We've been talking about a trade deal with the US for 30 years... I think one needs to really examine why it hasn't happened. And I think it's very much the deep state," he said, according to the ANI interview. He described the absence of a bilateral trade pact as one of India's biggest policy shortcomings over the past three decades.
Trade Surplus Data and Global Comparison
Bhalla provided quantitative context for India's trade relationship with the US. "If you take the trade surplus with the US and compare it to the aggregate trade surplus of Japan, the EU and the UK, it's four times. One is about 70 billion and the other is about 15 billion," he said. The following table summarizes the comparison:
| Indicator | Value |
|---|---|
| India's trade surplus with the US | ~$70 billion |
| Aggregate trade surplus of Japan, EU, and UK | ~$15 billion |
| Ratio | 4:1 |
Bhalla also dismissed the notion that trade agreements with other major economies could substitute for a pact with the United States. "The UK trade deal doesn't do any of that. The Japanese trade deal doesn't do any of that. The EU trade deal doesn't do anything of that," he said.
Call for Transparency and Action
When asked what advice he would give Prime Minister Narendra Modi if he were to return as an economic adviser, Bhalla responded: "Trade deal with the US, 100%. Without thinking." He argued that the benefits extend beyond trade alone. "It will unleash competition, unleash the competitive urge. It will remove comfort. It will remove complacency," Bhalla said.
The article also referenced ongoing trade tensions, noting a separate report on a fresh Trump tariff threat and India's stance on a US Section 301 probe that proposes 12.5% duties. This context underscores the urgency of the bilateral trade negotiations.
Bhalla reiterated that if India intends to achieve developed economy status by 2047, it must expand its focus beyond the domestic market and deepen its engagement with the global economy. A comprehensive trade deal with the US, he argued, is the single most important policy to unleash India's "animal spirits" and secure its place on the global stage.
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