March 31, 2025
The decision comes after four days of senior-level discussions in Delhi, amid threats from the US to impose reciprocal tariffs on April 2
The BTA aims to improve market access, reduce tariff and non-tariff barriers, and deepen supply chain linkages, with the first tranche expected by August–September 2025
US officials, led by Assistant Trade Representative Brendan Lynch, discussed doubling bilateral trade to US$500 billion by 2030 and finalised the pact’s terms of reference
Indian exporters have urged protection against US tariffs, especially as the US seeks concessions in agriculture and industrial goods, while India is likely to exclude sensitive agri and dairy sectors.
The Commerce Ministry announced that India and the United States will begin sector-specific expert-level engagements in the coming weeks to finalise the structure of the proposed bilateral trade agreement (BTA). This move follows four days of senior-level discussions between both nations in New Delhi.
The development comes at a crucial time, as the US has issued warnings about imposing reciprocal tariffs on major trading partners, including India. The measures are scheduled to take effect on 2 April.
The Ministry stated that virtual expert-level meetings would prepare for an early in-person negotiating round and help chart a path toward a multi-sector agreement that benefits both nations.
To promote shared goals of economic growth, fairness, job creation, and national security, the two sides have broadly agreed on the next steps and are aiming to finalise the first tranche of the agreement by the fall of 2025.
According to the Ministry, the BTA will focus on enhancing market access, cutting tariff and non-tariff barriers, and strengthening supply chain integration in a way that serves mutual interests.
Both sides have committed to building on the outcomes of these recent talks in the months ahead, ensuring the BTA aligns with the joint vision of resilience, shared prosperity, and balanced benefits.
A US delegation, led by Assistant US Trade Representative for South and Central Asia Brendan Lynch, visited India to shape the contours and terms of the proposed pact. The agreement seeks to more than double bilateral trade between the two countries to US$500 billion by 2030.
The ongoing dialogue builds upon earlier discussions held during Commerce and Industry Minister Piyush Goyal’s visit to Washington from 4–6 March, where he met US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick. The meetings were followed by several virtual interactions.
Meanwhile, US President Donald Trump recently described Prime Minister Narendra Modi as a highly capable leader and expressed confidence that tariff-related negotiations between the two nations would be resolved successfully. His comments come despite his frequent criticism of India’s high tariff structure on American products.
He reiterated that India is among the countries imposing the highest tariffs on US goods and added that the discussions with India had been constructive and were expected to yield favourable results.
A bilateral trade agreement typically reduces or eliminates customs duties on a wide range of goods and facilitates greater ease in services trade and investment.
While the US is pressing India for tariff concessions in sectors such as industrial goods, automobiles, wines, petrochemicals, dairy, and agricultural items like apples, tree nuts, and alfalfa hay, India is expected to negotiate cuts in labour-intensive sectors like textiles.
Indian exporters and industry stakeholders have urged the government to seek exemptions from any upcoming US tariffs, warning that such measures could severely impact trade given that the US is India’s largest export destination.
The US has also pushed for a more expansive trade deal, particularly one that opens India’s agriculture market to American businesses. However, experts suggest that India is unlikely to include dairy and agriculture in the negotiations due to their political sensitivity.
In 2024, US agricultural exports to India were valued at US$1.6 billion, with key products including in-shell almonds (US$868 million), pistachios (US$121 million), apples (US$21 million), and ethanol (US$266 million).
India had earlier lifted retaliatory import duties on eight US items — including chickpeas, lentils, and apples — in June 2023. These duties were originally imposed in 2019 in response to US tariff hikes on steel and aluminium products.
India’s top exports to the US in 2024 included drug formulations and biologics (US$8.1 billion), telecom instruments (US$6.5 billion), precious and semi-precious stones (US$5.3 billion), petroleum products (US$4.1 billion), gold and other precious metal jewellery (US$3.2 billion), ready-made cotton garments (US$2.8 billion), and iron and steel products (US$2.7 billion).
On the import side, India sourced crude oil (US$4.5 billion), petroleum products (US$3.6 billion), coal and coke (US$3.4 billion), cut and polished diamonds (US$2.6 billion), electrical machinery (US$1.4 billion), aircraft and spacecraft components (US$1.3 billion), and gold (US$1.3 billion) from the US.
In FY 2023–24, the US emerged as India’s largest trading partner, with bilateral goods trade totalling US$119.71 billion. India exported US$77.51 billion worth of goods to the US, imported US$42.19 billion, and recorded a trade surplus of US$35.31 billion.
Additionally, between April 2000 and September 2024, India received US$67.8 billion in foreign direct investment (FDI) from the US.
Source: The Hindu