US-India
The governments of the United States and India have been talking about negotiating a bilateral investment treaty for several years. The idea of a broader trade agreement between the two countries has often been mentioned as a longer term goal.
Bilateral relations between the two powers over the past decades have been complex. During the Cold War, India was non-aligned but friendly with Russia. Since 1991, India took a major turn by adopting neoliberalism as an economic frame for the country’s "development" strategy, and relations with the West subsequently thawed. Starting in 2005, India and the US signed a series of major bilateral cooperation agreements including the areas of defence, agriculture and food security, nuclear technology, energy, education, etc. Many of these initiatives met strong criticism at home in India as they frequently create conditions that benefit global capital and elites at the expense of local communities, especially in the rural areas.
In this process, since 2008, the governments of both countries also committed to signing a bilateral investment treaty, but this is taking some time. In 2014 and 2015, India reviewed its earlier "bilateral investment protection and promotion agreements" (BIPPAs) and decided to draw up a model "bilateral investment treaty" (BIT) to replace those BIPPAs. The Indian model BIT is still under debate but it departs from the US model BIT in several respects. Thus it could be a challenge to come to a common agreed text. But US business associations, which include many major TNCs among their members, are pushing hard to finalise a deal. Civil society organisations both in India and the US have been mobilising against the deal.
In parallel to this, India has been revising its policies on foreign direct investment, notably by opening up the country to foreign investment in multibrand retail (e.g. Walmart or Tesco), and on taxation.
US-India trade, in the meantime, has grown massively, with the US having a huge services trade deficit, much of which reflects the growth of outsourced US jobs to India.
Recommended reading:
Kavaljit Singh, "The India-US Bilateral Investment Treaty: Not an easy ride", January 2015
Last updated: 21 August 2015
Articles
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28-Apr-2008 US favours Nafta-type investment pact with India
The US wants to include labour and environment standards in the proposed bilateral investment agreement with India. While India wants to structure the pact on the lines of similar agreements that it has with other nations, the US wants to structure it on the lines of the investment chapter in the North American Free Trade Agreement (Nafta). -
28-Feb-2008 Mangalorean Private sector for India-US investment treaty by year-end
The US-India Private Sector Advisory Group has asked the two governments to negotiate a bilateral investment treaty by end of 2008 while continuing to promote sectoral openings. -
23-Feb-2008 US, India consider negotiating investment pact
The United States and India are discussing whether to negotiate a bilateral investment agreement as part of ongoing efforts to expand and deepen economic ties, a US official said on Friday. -
20-Feb-2008 Thaindian News No free trade pact with India for now: US
It is “premature” for the US to consider a free trade agreement with India, United States Trade Representative Susan C. Schwab said Wednesday -
14-Feb-2008 Economic Times Talks with US on for Bipa-like trade treaty
India and the US have begun discussions this week on an agreement to promote bilateral investment. The negotiations are expected to be protracted as the US agenda is highly ambitious. -
13-Feb-2008 Times of India GM trials in India threaten trade ties
India finds itself increasingly on the defensive in agricultural trade for permitting field trials across the country in a host of genetically modified food crops — rice, brinjal, okra, potato, tomato and groundnuts — and thereby exposing conventional crops to the risk of transgenic contamination. A case in point is a rather dodgy no-contamination certificate that the regulator, Genetic Engineering Approval Committee, was forced to give two months ago in response to a restriction imposed by Russia on import of rice, groundnuts and sesame seeds from India. -
10-Jan-2008 AFP US, India eye bilateral investment treaty
The United States and India are to explore the possibility of forging a bilateral investment agreement in high-level talks next month, US Treasury Secretary Henry Paulson said. -
9-Jan-2008 Telegraph Free trade with US in the works
Union commerce minister Kamal Nath today said India was in talks with the US and Canada for free trade agreements. “Bilateral trade agreements are currently in the pipeline with at least 10 potential partners ranging from the Asean (Association of South East Asian Nations), the EU, the US and Canada,” the minister said. -
9-Jan-2008 The Hindu FTA-like India-US pact in pipeline
India on Wednesday said it is in talks with the US and Canada for a market-opening bilateral agreement, on the lines of trade pacts being negotiated with the European Union and the ASEAN. -
4-Dec-2007 Sify Kamal Nath favours FTA with US
India’s Commerce and Industry Minister Kamal Nath has said a Free Trade Agreement between India and the United States needs to be closely looked at to foster a closer engagement with the world’s most powerful democracy. Analysts, however, say that Indian industry may not be too happy with the move for the fear of being swamped by powerful American companies. This may also lead to a surge in imports from the United States. -
3-Dec-2007 Reuters Congressman to introduce India trade legislation
A US congressman said on Sunday he planned to introduce legislation calling for the United States to begin talks with India on a free trade agreement. -
17-Apr-2007 Economic Times Lobbying begins on Indo-US free trade pact
First a nuclear deal, and next a free trade agreement. Industry lobbies in US are working towards activist’ agenda to eventually lead up to a Free Trade agreement between US and India, potentially the largest ever such deal. -
15-Apr-2007 Miami Herald US, India trade motorcycles for mangoes
Indian mangoes will hit US shelves for the first time in 18 years, while Harley Davidson motorcycles will soon be cruising India’s roads, senior officials said Friday. -
6-Mar-2007 ’America open to FTA with India’
The US is open to a Free Trade Agreement with India but wants bilateral economic engagement to increase further, a senior US government official said. -
25-Jan-2007 Rediff Industry body calls for Indo-US free trade pact
The South India Chamber of Commerce and Industry has emphasised the need for a dialogue between the US and India for drafting a free trade agreement to further boost trade between the two countries. -
22-Dec-2006 ag-IP-news US and India sign historic MoU on bilateral cooperation on IP
The Department of Commerce’s United States Patent and Trademark Office (USPTO) announced on Thursday that Under-Secretary of Commerce for Intellectual Property Jon Dudas and Ajay Dua, secretary of the Indian Ministry of Commerce and Industry (IMCI), recently signed a historic Memorandum of Understanding (MoU) on Bilateral Cooperation between the United States and India on intellectual property issues. -
15-Dec-2006 Hindustan Times Go for free trade pact with India after N-deal: US senator
An influential Republican senator has asked President George Bush to negotiate a full scale free trade agreement with India following the successful conclusion of the India-US civil nuclear deal. -
26-Oct-2006 Zee News US, India hold high level dialogue to deepen economic ties
The United States and India have held high level talks to boost bilateral trade and investment following a blueprint drawn up by the US-India CEO’s Forum. -
24-Oct-2006 Financial Express Doha is past; look towards FTA with US as the future, says Icrier
After the suspension of the Doha Round, India will gain much from a an FTA with the US in the ITeS/BPO sector, a study by economic thinktank Indian council of international economic relations has suggested. -
12-Oct-2006 Prospects for IT-enabled services under a Indo-US FTA
ITES/BPO services is an important and growing component of India’s trade in services with the US. While the Indian government has implemented several measures to support the growth of this sector, Indian companies face various barriers in the US market such as anti-outsourcing regulations, restrictive visa/work permit regime and concerns relating to protection of sensitive data.
