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With the July 9 deadline approaching to avert reciprocal tariff action from the United States, India has expressed a strong interest in finalizing a comprehensive bilateral trade agreement (BTA) with the world’s largest economy. Finance Minister Nirmala Sitharaman, in an exclusive conversation, emphasized that India is open to a "big, good, beautiful" trade pact with the US, provided it protects the interests of Indian farmers, dairy producers, and the larger domestic economy. India’s Vision: Strategic Trade Alliances for Economic Growth At a time when India is charting its path toward becoming a developed nation by 2047 under the "Viksit Bharat" vision, Sitharaman underscored the importance of forging meaningful trade partnerships with major global economies. “The sooner we secure agreements with strong economies like the US, the better they will align with our growth trajectory,” she noted. This sentiment reflects India’s push for greater global economic integration, especially in the context of fast-changing geopolitics and shifting trade dynamics. Agriculture and Dairy: India’s Non-Negotiable Red Lines While expressing optimism about a potential India-US trade agreement, Sitharaman also clarified that agriculture and dairy sectors remain sensitive areas where caution is paramount. She referred to these domains as “very big red lines,” adding that India will not compromise on the livelihoods of its farmers and livestock breeders. With American exporters keen to access India’s vast market, especially in agri-products and dairy, Indian negotiators are treading carefully. Protecting India’s food security, rural employment, and self-reliant dairy ecosystem remains a top policy priority. Private Investment on the Rise: Signs of Economic Revival Addressing concerns about a slowdown in private sector investment, the Finance Minister highlighted a shift in trend. “In the last six months, we’re clearly witnessing signs of revival. Private investments and capacity expansions are picking up,” she said. She pointed out that corporate India holds surplus capital and has been earning passive income. The government now sees the beginnings of this capital being deployed into productive assets and infrastructure, indicating confidence in India’s medium- to long-term economic outlook. Urban Economy Rebounding Post-Tax Relief On the topic of urban economic slowdown, Sitharaman mentioned that consumer sentiment is gradually improving. The income tax relief measures announced earlier in the year have started to stimulate demand, particularly in urban markets. “From April onwards, we’ve seen positive sentiment play out. People are spending, and that’s a strong indicator that the slowdown is reversing,” she said. Second-Generation Reforms to Strengthen the Economy The Finance Minister also announced that a series of second-generation economic reforms will soon be rolled out to provide a deeper structural push. These include: Banking sector reforms to enhance efficiency and competitiveness Promotion of private investment in nuclear energy Reforms in taxation, labour laws, and infrastructure financing These initiatives are designed to boost India’s global competitiveness and attract long-term investments. GST Reform in the Works: Lower Rates on the Horizon In a significant update, Sitharaman hinted at an upcoming restructuring of the Goods and Services Tax (GST) system. She mentioned the possibility of reducing the weighted average GST rate to enhance compliance and stimulate consumption. “The expectation is that the average rate will come down. Lower rates could lead to broader compliance and eventually boost revenue due to volume expansion,” she stated. This aligns with international best practices, where several countries have introduced GST/VAT at lower rates, achieving higher compliance and long-term revenue gains. Boosting Exports: Addressing Embedded Taxes Sitharaman emphasized the need to provide additional support to India’s merchandise exports, noting that not all taxes on exported goods are currently neutralized. “Certain embedded state and local levies are still present in exported products. We’re working on resolving that,” she said. This move could enhance the global competitiveness of Indian exporters and support the country's trade balance in the face of global headwinds. India’s Energy Transition: Nuclear, Solar & Wind in Focus As part of its broader energy strategy, India is gearing up to expand its base-load power capacity. Sitharaman announced that the government is pursuing small modular nuclear reactors as part of its clean energy initiative. She added that legislative changes would be made to facilitate private participation in the nuclear energy sector. “India needs to scale up its base energy capacity. While coal-based power is seeing a short-term resurgence due to high peak demand, nuclear, solar, and wind energy will remain central to our long-term energy policy,” she stated. Labour Laws and Land Reforms: No U-turns Sitharaman reaffirmed the government's commitment to the three labour codes, stating that many states are actively implementing them. She also hinted at ongoing reforms in land use and asset monetisation, though without delving into specifics. “There is no going back on the labour reforms. These are essential for ensuring a modern, productive labour market,” she added. CASA Deposits and Banking Challenges In her recent meeting with the heads of public sector banks, Sitharaman addressed the concern over declining CASA (Current Account Savings Account) deposits, which traditionally served as a cheap source of capital. “Retail investors are increasingly moving their savings to equity markets. This poses a challenge for banks, but they’re looking to raise funds through market channels,” she said. The need to balance attractive deposit rates and affordable credit remains a tightrope walk for bankers, she acknowledged. States Must Improve Investment Climate In a strong message to state governments, Sitharaman stressed the importance of creating a uniform investment-friendly environment across the country. “Investments that are flowing into certain regions must be enabled to reach other parts of India too,” she cautioned. Balanced regional growth, according to her, is vital to the country’s long-term development strategy. As the countdown to the July 9 trade deadline begins, India stands firm in its pursuit of a strategic, balanced, and mutually beneficial trade agreement with the United States. While the nation is eager for enhanced economic cooperation with global partners, it remains committed to safeguarding its domestic priorities — particularly in agriculture, dairy, and small-scale industries. With reforms in GST, energy, labour, and banking on the horizon, India is clearly gearing up for a transformative economic phase. Finance Minister Nirmala Sitharaman’s remarks reflect a calibrated yet forward-looking approach to building a resilient and globally competitive Indian economy.

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India Keen on a ‘Big, Beautiful’ Trade Deal with the US: Finance Minister Nirmala Sitharaman