When NITI Aayog CEO B.V.R. Subrahmanyam declared India the “brightest spot in the world,” it was more than optimism—it was a statement of intent. His remarks came as New Delhi and Washington renewed discussions on a long-anticipated Bilateral Trade Agreement (BTA), with expectations of tangible progress by the end of November.
India’s economic trajectory—rooted in structural reforms, robust domestic demand, and manufacturing expansion—stands in stark contrast to the stagnation and inflation confronting several advanced economies. With GDP growth hovering around 7.5 percent in 2024–25, India now contributes over 7 percent to global growth, a feat unmatched among large economies.
Yet, as India pursues its next growth phase, the road to a US trade pact could define how effectively it converts macroeconomic momentum into long-term strategic and industrial gains.
Manufacturing and Policy Convergence
At the heart of India’s growth strategy lies a simple but ambitious goal: to raise manufacturing’s share of GDP from 15–17 percent to 25 percent. The government’s policy focus combines supply-side incentives, deregulation, and infrastructure expansion to transform India into a global manufacturing and export hub.
This transformation is anchored in Production-Linked Incentive (PLI) schemes, new logistics and industrial corridor policies, and aggressive infrastructure spending designed to integrate domestic industries into shifting global value chains. As multinational corporations look to diversify production beyond China, India is positioning itself as a key alternative.
Sectors such as electronics, semiconductors, electric vehicles, pharmaceuticals, and defense manufacturing are at the forefront of this push. However, incentives alone will not suffice. Sustained progress depends on technology transfer, skill development, and trade partnerships—elements that a potential India–US trade deal could catalyze.
A formal BTA could provide Indian exporters access to advanced US technologies, deepen collaboration in clean energy and digital trade, and enhance India’s participation in resilient, high-tech supply chains under frameworks like the Quad and iCET (Initiative on Critical and Emerging Technologies).
Trade Diplomacy and Strategic Significance
The prospect of an India–US Bilateral Trade Agreement signals a new phase in the two democracies’ economic relationship. Bilateral trade already exceeds $190 billion annually, making the US India’s largest trading partner. But persistent issues—tariffs on agricultural products, intellectual property rights, and data localization rules—have historically stalled progress.
Still, the strategic logic is undeniable. As the World Trade Organization faces paralysis and global trade governance fragments, both nations are turning toward bilateral and plurilateral frameworks to safeguard their interests. For Washington, India is a credible production hub aligned with its Indo-Pacific Economic Framework (IPEF) vision. For New Delhi, the pact represents access to the world’s most advanced market and a foundation for deeper cooperation in green technology, AI, and digital commerce.
If concluded, the BTA could bolster investor confidence, open markets for Indian goods and services, and elevate the partnership from tactical alignment to institutionalized economic interdependence.
Sustaining the Momentum
India’s confidence is underpinned by strong fundamentals: controlled inflation, fiscal prudence, record foreign exchange reserves, and unprecedented capital investment in roads, ports, and renewable energy. These elements have shielded the economy from global headwinds while reinforcing its attractiveness to international investors.
Yet, structural challenges persist. Scaling manufacturing to a 25 percent GDP share demands steady credit flow, uniform state-level reforms, and improvements in logistics and energy reliability. The government must ensure that growth remains inclusive and that the benefits of industrialization reach beyond metropolitan hubs.
Even so, India’s narrative has shifted. No longer viewed merely as a cost-efficient alternative, it is increasingly seen as a policy-driven innovation center and strategic partner in reshaping global trade architecture.
From Aspiration to Assertion
India’s economic resurgence and pursuit of a US trade pact reflect a nation in transition—from participant to architect in the global economy. A successful BTA would not just expand exports or attract investment; it would signify India’s arrival as a reform-oriented, strategically aligned power capable of shaping the rules of global commerce.
Subrahmanyam’s optimism, then, is not misplaced. India’s challenge is to convert its growth momentum into sustainable competitiveness, ensuring that its next decade of prosperity is powered not merely by demand, but by design.
(With agency inputs)
