India and US to Finalize Bilateral Trade Agreement
Sector-Specific Talks Scheduled for Coming Weeks
India and the United States have agreed to hold sector-specific talks in the coming weeks to finalize the structure of a proposed bilateral trade agreement (BTA). This decision follows four days of discussions between senior officials from both countries, which concluded on Saturday.
Expert-Level Engagements and In-Person Negotiations
- Expert-level engagements will begin virtually in the coming weeks.
- In-person negotiation round expected soon after virtual meetings.
- Both sides aim to realize a mutually beneficial, multi-sector BTA.
- First tranche of the agreement to be finalized by fall 2025.
The proposed agreement seeks to increase market access for goods, reduce tariff and non-tariff barriers, and enhance supply chain integration between the two countries.
US Delegation Visits India to Finalize Terms
A US delegation, led by Assistant US Trade Representative for South and Central Asia Brendan Lynch, visited India to finalize the terms of the proposed pact. The agreement aims to more than double bilateral trade to USD 500 billion by 2030.
Commitment to Finalizing the BTA
Both sides expressed their commitment to finalizing the BTA in the coming months, ensuring that the agreement aligns with shared goals of prosperity, resilience, and mutual benefit.
Continuation of Previous Discussions
The discussions are a continuation of Commerce and Industries Minister Piyush Goyal’s visit to Washington from March 4-6, where he met with US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick. Video conferences were also held between both parties to follow up on the talks.
Positive Remarks from US President Donald Trump
On Friday, US President Donald Trump referred to Prime Minister Narendra Modi as “a very smart man” and emphasized that tariff talks would “work out very well between India and our country.” Trump’s remarks are significant given his criticism of the high tariffs charged by India and other countries on American goods. He has threatened to impose reciprocal tariffs on trading partners, including India, starting on April 2.
Potential Impact on Indian Exporters and Industry Groups
Indian exporters and industry groups have expressed concern that the USA’s reciprocal tariffs could harm their interests, as the US is India’s largest trading partner. There are also calls for India to seek exemptions from these tariffs to mitigate the potential impact.
India-US Bilateral Trade in 2023-24
- Total bilateral trade: USD 119.71 billion
- Indian exports: USD 77.51 billion
- Indian imports: USD 42.19 billion
- Trade surplus for India: USD 35.31 billion
The US has been a major source of foreign direct investment (FDI) for India, with USD 67.8 billion in investments received from the US between April 2000 and September 2024.
