Market expert Ajay Bagga has issued a stark warning about the potential economic consequences of the ongoing India-US trade stalemate, expressing concerns that prolonged negotiations could result in significant job losses across key export sectors. Speaking exclusively to NDTV Profit, Bagga painted a pessimistic picture of the bilateral trade talks, stating he does not foresee a trade deal materialising in the near term.

Trade Deal Prospects Remain Dim

Bagga's assessment comes amid growing uncertainty over the India-US trade relationship, with the expert citing a lack of urgency from the American side. "I don't foresee a trade deal. They're making an example out of India," Bagga told NDTV Profit, suggesting that the US approach lacks the necessary commitment to reach a swift resolution.

The comments follow recent pushback from Indian officials against speculation about delays in the negotiations. Union Commerce Minister Piyush Goyal had urged confidence in India's negotiating position after the Ministry of External Affairs rejected claims that talks stalled due to Prime Minister Narendra Modi not calling US President Donald Trump.

Sector-Specific Job Loss Risks

The market expert highlighted specific vulnerabilities across India's labour-intensive export sectors, warning of potential second-order effects that could ripple through the economy:

Bagga emphasised that the services sector faces particularly acute risks, given its substantial contribution to India's external earnings. "It is a very big risk for India," he stated, outlining a concerning chain of effects: prolonged stalemate leading to continued tariff pressure and uncertainty, which would weaken export competitiveness and ultimately create employment stress in key sectors.

Geopolitical Factors Shape Trade Outcomes

The expert drew connections between trade policy and broader geopolitical developments, suggesting that the resolution of the 25% punitive tariff on India may depend on factors beyond bilateral economic considerations. According to Bagga, "The 25% excess tariff could be removed if there is a Russia–Ukraine peace deal," indicating that trade outcomes are increasingly intertwined with global political settlements rather than purely economic negotiations.

This perspective highlights the complex web of international relations that now influences bilateral trade discussions, making traditional economic diplomacy more challenging to navigate.

Call for Interim Solutions

Despite the challenging environment, Bagga advocated for a pragmatic approach to the negotiations. He urged India to pursue interim arrangements even if a comprehensive trade agreement remains elusive. "India needs to conclude some kind of a transient agreement, even if a trade deal doesn't happen," he recommended, though he expressed doubts about movement given what he described as a "very aggressive Trump administration."

Broader Market Concerns

Beyond trade issues, Bagga also raised concerns about developments in US monetary policy, specifically criticising the criminal investigation involving Federal Reserve Governor Jerome Powell. He described this as a "huge disappointment" and warned that markets would closely monitor the fallout, particularly in bond markets. The expert noted that previous market disappointments had been reflected in bond market movements, suggesting similar patterns could emerge.

Bagga's comprehensive assessment underscores the interconnected nature of trade policy, geopolitics, and market dynamics, painting a picture of significant challenges ahead for India's export-dependent sectors unless diplomatic breakthroughs emerge.

Source: https://www.moneycontrol.com/news/business/markets/it-s-a-very-big-risk-for-india-ajay-bagga-warns-india-us-trade-limbo-could-cost-jobs-in-these-sectors-13768451.html

Commerce Minister Goyal has announced that bilateral trade deal negotiations between India and the United States are currently in progress. The confirmation comes as both nations continue their diplomatic engagement to strengthen economic ties and enhance bilateral trade relationships.

Current Status of Negotiations

According to Goyal's statement, the talks between India and the US for a bilateral trade agreement remain active. This indicates that both countries are maintaining their commitment to exploring opportunities for enhanced trade cooperation and economic partnership.

Significance for Bilateral Relations

The ongoing negotiations represent a continuation of diplomatic efforts between India and the United States to deepen their economic relationship. Such bilateral trade discussions typically focus on reducing trade barriers, enhancing market access, and creating frameworks for increased commercial exchange between the two nations.

The confirmation of active talks suggests that both countries recognize the potential benefits of a structured trade agreement and remain committed to finding mutually beneficial terms for enhanced bilateral commerce.