Should a U.S.-India FTA Be Part of India’s Trade Strategy?

In the current political environment, it is an understatement to say thata U.S.-India Free Trade Agreement (FTA) does not appear to be an idea whose time has come. Slow employment growth in the United States has raised fears about the loss of high-paying jobs to outsourcing, and the jobs lost to India have born the brunt of these concerns. Members of the U.S. Congress would surely not relish the opportunity to vote to endorse such trade. It is also unlikely that Indian politicians would relish the oppor-tunity to cast their lot with the United States and abandon long-held posi-tions on nonalignment, multilateralism, special and differential treatment, and domestic protection. Yet precisely because it challenges views held on these issues, the question posed by the title of this paper is important. It offers an opportunity to reflect on whether current trade rules and policies provide an adequate framework for realizing the full potential of India’s global integration and domestic reforms. For example, do current arrange-ments suffice to ensure that one of the most dynamic global linkages— services outsourcing—will continue to flourish? Should India continue t