Daijiworld Media Network - New Delhi
New Delhi, Apr 21: A newly released report indicates that India and the United States are on the cusp of formalizing a significant Bilateral Trade Agreement (BTA). This landmark pact is anticipated to unlock zero-duty import benefits for companies operating under India's Production-Linked Incentive (PLI) schemes, thereby injecting substantial momentum into the burgeoning trade relationship between the two nations. The ambitious goal is to elevate bilateral commerce to an impressive $500 billion by the close of the decade.
The timing of this report coincides with the arrival in India of United States Vice President J.D. Vance and his family, adding a layer of diplomatic significance to the development. The analysis further highlights that the BTA is expected to pave the way for the influx of sophisticated US technologies into critical sectors within India, including defence, clean energy, and advanced manufacturing.
Despite the turbulence in the global economic landscape, the report by Asit C. Mehta Investment Interrmediates Ltd (ACMIIL), a Pantomath Group entity, underscores India's inherent strengths. The nation's consumption-driven economy, its demographic dividend, and its relatively lower reliance on exports position it favorably to navigate international headwinds. Notably, India's merchandise exports to the US constitute a mere 2.1 percent of its GDP, rendering it less susceptible to external shocks compared to economies heavily dependent on exports.
The report emphasizes India's strategic advantage in capitalizing on the ongoing diversification of global supply chains, particularly in light of the substantial tariffs imposed by the US on imports from China. In comparison, India's reciprocal tariff rate of 26 percent is deemed moderate, enhancing its attractiveness as a manufacturing and trading hub.
India's robust macroeconomic fundamentals further bolster its economic resilience. The nation is projected to achieve a GDP growth rate of 6.5 percent in FY26, coupled with a steadfast commitment to fiscal prudence, evidenced by the anticipated reduction of the fiscal deficit to 4.9 percent in FY25. Moreover, the Reserve Bank of India's recent shift towards a more accommodative monetary policy, with expected repo rate cuts, is poised to galvanize private investment.
A key structural advantage identified in the report lies in India's dynamic demographics, with a significant 51 percent of its population under the age of 40. This youthful demographic is a powerful engine for consumption, with Gen Z and millennials emerging as the primary drivers of spending.
From a market perspective, technical and valuation indicators suggest a potential bottoming out, creating a fertile ground for medium- to long-term outperformance in equities. The government's proactive policy support, exemplified by initiatives like ‘Make in India’ and a strong emphasis on enhancing the ease of doing business, continues to fortify various sectors of the Indian economy, the report concludes.