India and the United States have finalized the terms of reference (ToRs) for a proposed bilateral trade agreement (BTA), covering approximately 19 chapters addressing significant issues such as tariffs, goods, non-tariff barriers, and customs facilitation, according to official sources.
A three-day round of talks is set to begin in Washington on April 23, aimed at resolving outstanding issues within the context of a 90-day tariff pause.
The finalized ToRs reflect both countries’ commitment to establish a comprehensive framework for trade negotiations, with critical areas including tariffs and other trade regulations being highlights of the discussions.
To further advance the talks during the ongoing tariff pause, an Indian official team will visit Washington next week to address certain differences before the formal launch of negotiations for the proposed BTA.
Leading this official delegation is India’s chief negotiator, Additional Secretary in the Department of Commerce, Rajesh Agrawal, who has recently been appointed as the next commerce secretary, set to assume office on October 1.
The in-person discussions between the Indian team and their US counterparts will kick off on Wednesday, April 23.
During these talks, both sides will deliberate on the level of ambition for the agreement, with a focus on refining the ToRs and outlining the pathway for future discussions.
The issues under consideration include not only tariffs and non-tariff barriers, but also rules of origin and a variety of regulatory matters.
An official source indicated that the general contours of the pact would be fleshed out, along with a schedule aimed at solidifying agreements within the allocated 90-day timeframe.
These deliberations are particularly significant as a senior government official previously suggested that if a win-win scenario could be crafted, an interim trade agreement between India and the US might be finalized during the 90-day tariff pause initiated by the Trump administration.
In international trade discussions, the term ‘level of ambition’ refers to how far both countries are willing to go in committing to specific measures that would liberalize trade.
The upcoming visit also follows recent official-level talks held between representatives of both nations, supporting ongoing dialogue.
Brendan Lynch, the Assistant US Trade Representative for South and Central Asia, was in India from March 25 to March 29 for crucial trade discussions with Indian officials, highlighting the continuing commitment of both governments to advance trade relations.
Both India and the US are keen to leverage the temporary tariff reprieve announced by President Donald Trump on April 9 to accelerate these trade discussions.
On April 15, Commerce Secretary Sunil Barthwal emphasized India’s intent to finalize the negotiations promptly with the US.
Since March 2024, India and the US have been engaged in negotiations aiming to complete the first phase of the bilateral trade agreement by the fall of the current year, with ambitious goals set to double bilateral trade to USD 500 billion by 2030, up from approximately USD 191 billion currently.
A bilateral trade agreement typically entails either significantly reducing or completely eliminating customs duties on the majority of traded goods between both countries.
Additionally, trade pacts focus on easing regulations to promote not only goods but also services and investments in both markets.
The US is particularly interested in securing duty concessions across various sectors such as specific industrial goods, automobiles (notably electric vehicles), wines, petrochemical products, dairy, and agricultural items including apples, tree nuts, and alfalfa hay.
Conversely, India is likely to advocate for duty reductions in labor-intensive industries such as apparel, textiles, gems and jewelry, leather, plastics, chemicals, oil seeds, shrimp, and horticultural products.
From the fiscal year 2021-22 to 2024-25, the United States has consistently remained India’s largest trading partner.
The US constitutes about 18 percent of India’s total goods exports, 6.22 percent of imports, and 10.73 percent of total bilateral trade.
In 2024-25, India recorded a trade surplus of USD 41.18 billion in goods with the US, reflecting increasing exports compared to a surplus of USD 35.32 billion in 2023-24, USD 27.7 billion in 2022-23, USD 32.85 billion in 2021-22, and USD 22.73 billion during 2020-21.
However, the US has expressed concerns regarding India’s growing trade surplus, urging measures to address the trade imbalance.
In early April, in an effort to reduce this gap and enhance domestic manufacturing, the Trump administration implemented broad tariff measures, including a 26 percent tariff on Indian goods, which was subsequently suspended for a 90-day period until July 9.
In 2024, key exports from India to the US included drug formulations and biologicals (USD 8.1 billion), telecom instruments (USD 6.5 billion), precious and semi-precious stones (USD 5.3 billion), petroleum products (USD 4.1 billion), and gold jewelry (USD 3.2 billion).
Meanwhile, the US imports from India featured crude oil (USD 4.5 billion), petroleum products (USD 3.6 billion), coal and coke (USD 3.4 billion), polished diamonds (USD 2.6 billion), electric machinery (USD 1.4 billion), and aircraft and spacecraft parts (USD 1.3 billion).
As the talks progress, stakeholders on both sides remain hopeful for a mutually beneficial trade agreement that could transform the economic landscape between India and the United States.
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