As India and the U.S. explore pathways to deepen trade relations, the Global Trade Research Initiative (GTRI) has issued a cautionary advisory: avoid a comprehensive Free Trade Agreement (FTA) and instead pursue a selective Zero-to-Zero tariff deal covering industrial goods. This approach aims to boost bilateral trade while safeguarding critical domestic sectors.

📌 What is a Zero-to-Zero Tariff Deal?

A Zero-to-Zero tariff deal refers to a trade pact where both countries agree to eliminate tariffs on a specified range of products—typically industrial goods—ensuring zero customs duty on both ends. It excludes sensitive sectors like agriculture, pharmaceuticals, and e-commerce, shielding them from potential disruption.

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🔍 Key GTRI Recommendations at a Glance

Area of Focus	Recommendation / Concern	Implication
Comprehensive FTA	Avoid full-scale FTA with the U.S.	Prevents asymmetric trade-offs that could harm sensitive Indian sectors.
Trade Strategy	Opt for “Zero-to-Zero” tariff deal on 90% of industrial goods	Encourages balanced industrial trade without opening vulnerable sectors.
Agriculture	Protect MSP system and food security	Avoid influx of GM foods and protect farmer livelihoods.
Pharma & Healthcare	Resist U.S. patent rules in FTA	Prevents monopolistic pricing and ensures access to affordable generics.
Retail & E-commerce	Avoid unregulated entry of U.S. giants	Protects small domestic retailers from being overrun.
Automotive Sector	Don’t reduce tariffs on U.S. cars	Shields domestic auto manufacturers and jobs.
Trade History	India’s past trade concessions weren’t reciprocated	Encourages a cautious, mutually beneficial strategy.
Preferred Trade Partners	Focus on EU, UK, Canada, ASEAN, Japan, S. Korea	Diversifies trade relationships beyond the U.S.
Strategic Alliances	Collaborate with China and Russia on value chains	Supports Make in India and export-driven manufacturing.

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🌐 Why a Full FTA with the U.S. May Be Risky

GTRI outlines that a comprehensive FTA may come at the cost of:

• Weakening of food security, especially if India allows large-scale imports of subsidized or genetically modified agricultural products.
• Higher medicine prices, due to prolonged patent protections being pushed by U.S. pharma lobbyists.
• Job losses, particularly in automotive and retail, due to tariff cuts on U.S. vehicles and liberal e-commerce norms.

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✅ Strategic Pivot: Advantages of Zero-to-Zero Tariff Deal

Feature	Explanation
Narrow Scope	Covers only industrial goods, minimizing political resistance.
Quick Bilateral Gains	Enables faster mutual access to manufacturing markets.
Protective Flexibility	Sensitive sectors can be excluded entirely.
Economic Boost	Increases trade volumes in capital goods and technology-intensive products.
No Legal Overreach	Doesn’t impose regulatory changes or affect domestic standards.

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🌍 Looking Forward: A Multi-Pronged Trade Strategy for India

GTRI urges India to focus on selective bilateralism—targeted agreements with economic allies that do not compromise sovereignty or key sectors. Additionally, India must:

• Leverage the PLI scheme and Make in India for value-added exports.
• Develop joint manufacturing ecosystems with nations like China and Russia.
• Strengthen logistics and infrastructure to make Indian exports globally competitive.

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📣 Conclusion: Pragmatism Over Prestige

While a full-scale FTA may look like a diplomatic win, GTRI stresses that trade realism is far more vital. A Zero-to-Zero tariff deal offers a middle path—one that promotes industrial growth, protects livelihoods, and avoids the pitfalls of wide-ranging concessions.

India’s next chapter in global trade should be one of strategic autonomy, not dependency.