India and the United States are holding regular virtual discussions to advance the proposed Bilateral Trade Agreement (BTA) and address long-pending reciprocal tariff issues. Commerce Secretary Rajesh Agarwal said that most technical matters have been resolved and that India expects the first phase of the agreement to be concluded within the current calendar year.
Status of Negotiations
- The Commerce Secretary confirmed that only a few issues remain outstanding, and these can be resolved at the political level.
- India is negotiating two parallel tracks with the US:
- A comprehensive trade deal (BTA)
- A tariff-related agreement covering duties imposed by the US in recent years
- A comprehensive trade deal (BTA)
Agarwal noted that global trade conditions have changed significantly since negotiations began, but both sides are aligned on the need for a timely conclusion.
Reciprocal Tariff Discussions
India and the US continue to negotiate a framework to address:
- The 25% reciprocal tariffs imposed earlier by the US
- The 25% tariff on certain oil products
- Additional duties that came into effect on 27 August 2024, under which the US has imposed 50% tariffs on a wide range of Indian exports
India estimates these duties could affect USD 48.2 billion worth of goods (based on 2024 export values).
Agarwal said that removing these higher tariffs would materially benefit Indian exporters.
Areas Where India Seeks Concessions
India has requested tariff relief on:
- Textiles
- Gems and jewellery
- Leather goods
- Apparel
- Plastics
- Chemicals
- Shrimp
- Oilseeds
- Grapes and bananas
These are labor-intensive sectors with a direct impact on domestic employment and MSME exporters.
US Requests for Market Access
The United States is seeking concessions in:
- Industrial goods
- Automobiles (especially electric vehicles)
- Wines and alcoholic beverages
- Petrochemicals
- Dairy products
- Agricultural items such as apples, tree nuts and GM crops
These demands reflect the US interest in expanding market access for high-value manufactured and agricultural products.
Bilateral Trade Momentum Remains Strong
- India’s exports to the US this year are USD 10 billion higher than last year.
- The Commerce Secretary said India’s current trade deficit is not in a “worrying zone.”
- India expects official-level US visits in the coming weeks as talks progress.
Agarwal reiterated that India–US trade relations “have strengthened consistently over the past two decades,” and the government is optimistic that the first tranche of the BTA will be completed soon.