India, US may focus on goods sector in first phase of trade agreement

India and the US aim to finalize a bilateral trade agreement (BTA) focusing initially on goods by fall 2023, followed by services. The pact seeks to significantly boost bilateral trade to USD 500 billion by 2030. Upcoming sector-specific talks will address trade tariffs, with US interests in industrial goods and agriculture, and India’s focus on […]

India’s merchandise exports are projected to fall slightly below USD 435 billion for FY 2024-25 due to factors like global oil price volatility and uncertainties. Key sectors such as petroleum products and gems and jewelry have recorded significant declines, highlighting the need for strategic interventions to support recovery.

India and the US will initiate virtual sectoral expert-level engagements for a bilateral trade agreement, progressing towards in-person negotiations to boost bilateral trade to $500 billion by 2030. The initial focus will be on tariff concessions and market access for goods.

India and the US held trade talks in New Delhi to work towards a Bilateral Trade Agreement (BTA) aimed at expanding trade to USD 500 billion by 2030. The goal is to finalize the first tranche by fall 2025, with discussions focusing on market access, reducing barriers, and supply chain integration.

“They discussed ongoing efforts to reduce barriers to achieve a fair and balanced bilateral trade relationship, strengthen collaboration in defense and technology, and boost security and prosperity throughout the Indo-Pacific region,” US Department of State’s spokesperson, Tammy Bruce said.

India and the US will begin detailed sectoral discussions under their proposed bilateral trade agreement following four days of negotiations. The collaboration aims to enhance market access, reduce trade barriers, and deepen supply chain integration, targeting finalisation of the initial phase by fall 2025.

As the US prepares to implement new tariffs starting April 2, India’s exports, especially in sectors like apparel and auto parts, face significant challenges. India is negotiating tariff cuts on US imports to mitigate impacts, while also exploring strategic opportunities to gain market share vacated by other countries.

US President Donald Trump praised Indian Prime Minister Narendra Modi as a ‘very smart man’ and a ‘great friend’ while highlighting ongoing tariff discussions. Trump, who has previously criticized high tariffs on US goods, remains optimistic about favorable trade negotiations between the two nations.

Foreign Secretary Vikram Misri and U.S. Deputy Secretary of State Christopher Landau discussed the deepening India-U.S. partnership, covering strategic interests, bilateral trade, defense, technology cooperation, and mobility issues. Misri congratulated Landau on his recent Senate confirmation and invited him to visit India soon. Both agreed to remain actively engaged on mutual concerns.

India is meticulously evaluating the consequences of the US imposing additional import duties on steel and aluminium. These increased tariffs could impact around $6 billion worth of exports from India to the US. Both nations are striving to enhance their bilateral trade, aiming to double it by 2030 through a comprehensive trade agreement.