'Significant progress' in India-US trade deal

Modi, Vance welcome 'significant progress' in India-US trade deal

Subhayan Chakraborty New Delhi - business-standard.com/ Apr 21 2025

India and the United States have welcomed “significant progress” in ongoing negotiations for a mutually beneficial Bilateral Trade Agreement (BTA), the government said following a meeting between Prime Minister Narendra Modi and American Vice President J D Vance in New Delhi on Monday.

 Visiting India amid a globally unfolding trade war, Vance held detailed discussions with Modi, reviewing and positively assessing the progress in various areas of bilateral cooperation, the Prime Minister’s Office (PMO) said in a statement.

 Both countries also noted continued efforts to enhance cooperation in areas such as energy, defence, strategic technologies, and other sectors, according to the PMO. The two leaders exchanged views on a range of regional and global issues of mutual interest, and called for dialogue and diplomacy as the preferred path forward.

 The Prime Minister conveyed greetings to US President Donald Trump, the PMO added, saying he looked forward to Trump’s visit to India later this year. The American president is expected to travel to India in September or October to attend the fifth Quad Leaders’ Summit.

 Both sides hope to conclude the first tranche of the BTA by the fall (September-October) this year. 

 Modi meets US Vice President Family in
New Delhi on Monday | Photo: PIB

India said the BTA would be centred on the “welfare of the people of the two countries”. The United States remains India’s largest export destination, with a trade surplus that widened to $41 billion in FY25, from $35 billion the previous year. While imports from the US grew 7.4 per cent to $45.3 billion, exports surged by 11 per cent to reach $86.5 billion -- a trade imbalance the Trump administration has frequently highlighted.

 Vance — accompanied by Second Lady Usha Vance and their children Ewan, Vivek, and Mirabel — was hosted at the Prime Minister's residence. Earlier in the day, the family visited the Akshardham Temple in Delhi.

 Vance's first official visit to India coincides with Union Finance Minister Nirmala Sitharaman’s five-day trip to the United States, where she will take part in the Spring Meetings of the International Monetary Fund (IMF) and the World Bank, along with several key G20 meetings. Sitharaman is also scheduled to hold bilateral talks with her counterparts from countries, including Argentina, Bahrain, Germany, France, Luxembourg, Saudi Arabia, the United Kingdom and the United States.

 Later this week, a team of commerce department officials, led by chief negotiator and commerce secretary-designate Rajesh Agarwal, will hold discussions with their US counterparts in Washington DC. The meetings, which are set to begin on April 23, will continue for three days.

 Vance arrived in New Delhi on Monday morning after a three-day official visit to Italy. The four-day trip to India is expected to deepen the India–US Comprehensive Global Strategic Partnership, the Ministry of External Affairs (MEA) said. The US Vice President will travel to Jaipur on Tuesday, followed by a visit to Agra on Wednesday to see the Taj Mahal.

India-US proposed trade pact's terms of reference include 19 chapters

The terms of references (ToRs) finalised by India and the US for the proposed bilateral trade agreement include around 19 chapters covering issues such as goods, services, and customs facilitation, official sources said.

To give further impetus to the talks, an Indian official team is visiting Washington next week to iron out differences on certain issues before formally launching negotiations for the proposed India-US bilateral trade agreement (BTA).

India's chief negotiator, Additional Secretary in the Department of Commerce Rajesh Agrawal, will lead the team for the first in-person talks between the two countries.

Agrawal was appointed as the next commerce secretary on April 18. He will assume office from October 1.

India to send delegation to US next week for key bilateral trade talks

The three-day Indian official team's talks with the US counterparts in Washington will start from Wednesday (April 23), the official said.

The visit, which comes within weeks of a high-level US team visiting India, indicates that the talks for the BTA are gaining momentum.

The visit follows senior official-level talks held between the two countries last month here.

Brendan Lynch, the Assistant US Trade Representative for South and Central Asia, was in India from March 25 to 29 for crucial trade discussions with Indian officials.

The two sides are keen to utilise the 90-day tariff pause, announced by US President Donald Trump on April 9.

On April 15, Commerce Secretary Sunil Barthwal had stated that India will try to close the negotiations as quickly as possible with the US.

He also stated that India has decided to follow the trade liberalisation path with the US.

India and the US have been engaged in negotiating a bilateral trade agreement since March. Both sides have targeted to conclude the first phase of the pact by the fall (September-October) of this year, with an aim to more than double the bilateral trade to USD 500 billion by 2030, from about USD 191 billion, currently.

In a trade pact, two countries either significantly reduce or eliminate customs duties on the maximum number of goods traded between them. They also ease norms to promote trade in services and boost investments.

While the US is looking at duty concessions in sectors like certain industrial goods, automobiles (electric vehicles particularly), wines, petrochemical products, dairy, and agriculture items such as apples, tree nuts, and alfalfa hay; India may look at duty cuts for labour-intensive sectors like apparels, textiles, gems and jewellery, leather, plastics, chemicals, oil seeds, shrimp, and horticulture products.

From 2021-22 to 2024-25, the US was India's largest trading partner.

The US accounts for about 18 per cent of India's total goods exports, 6.22 per cent in imports, and 10.73 per cent in bilateral trade.

With America, India had a trade surplus (the difference between imports and exports) of USD 41.18 billion in goods in 2024-25. It was 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 in 2020-21. The US has raised concerns over the widening trade deficit.

To address the gap and boost manufacturing, the Trump administration announced sweeping tariffs on April 2, including 26 per cent on India. It was later suspended till July 9.

In 2024, India's main exports 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), gold and other precious metal jewellery (USD 3.2 billion), ready-made garments of cotton, including accessories (USD 2.8 billion), and products of iron and steel (USD 2.7 billion).

Imports included crude oil (USD 4.5 billion), petroleum products (USD 3.6 billion), coal, coke (USD 3.4 billion), cut and polished diamonds (USD 2.6 billion), electric machinery (USD 1.4 billion), aircraft, spacecraft and parts (USD 1.3 billion), and gold (USD 1.3 billion).

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

We hope to sign first phase of bilateral pact with US by Oct: FM Sitharaman

Finance Minister Nirmala Sitharaman on Sunday said India is "actively engaging" with the new US administration and hopes to conclude the first tranche of the bilateral trade agreement "positively" by fall (September-October) this year.

"We are one of the countries which is actively engaged with the new administration of the United States of America to see how best we can get a bilateral trade agreement done," he said during an interaction with the Indian diaspora here.

Earlier this year, US President Donald Trump and Prime Minister Narendra Modi agreed to launch talks for a bilateral trade deal amid the lurking fear of reciprocal tariff being imposed by Washington.

"Equally, the priority that we gave to engage with the government here is more than obviously seen with the Prime Minister himself visiting the United States in February. You had the Commerce and Trade Minister come. I have come here because I also have the IMF and World Bank meeting.

"I am scheduled to meet the treasury secretary, my counterpart here. So the keenness with which we are engaging with the US administration, even as I talk, I think the US vice-president is in India. He will be engaging with the Prime Minister hopefully this evening or tomorrow," she said.

The US and India have aimed for a bilateral trade agreement (BTA), which is a kind of free trade pact. The two have decided to conclude the proposed BTA in two tranches or phases.

"So, the long and short of engaging with the US is not just reciprocal tariff-related matter but in the interest of keeping an agreement in mind and in the interest of one of the largest trading partners with whim we need to have agreement we are working in order that by the fall this year we should have first phase of agreement signed," she said.

The US President announced sweeping reciprocal tariffs (or import duties) on a number of countries, including India and China, on April 2.

However, on April 9, he announced a 90-day suspension of these tariffs until July 9 this year, except for those on China and Hong Kong, as about 75 countries approached America for trade deals. China is facing up to 245 per cent duty on its goods entering the US.

"In between all this, the Assistant USTR (US Trade Representative) had visited India to see the progress or to engage with the negotiating team who is dealing with the tariff-related negotiation and the bilateral trade agreement that we want to sign. In fact, the progress of the agreement, or the trade agreement that we are working on, at least a first tranche is something which we hope to conclude positively by the fall this year," she said.

Responding to a query on India's future global leadership and how the current budget supports this ambition, Sitharaman highlighted India's progress in critical areas like semiconductors, renewable energy -- including modular nuclear energy -- digital infrastructure, and artificial intelligence (AI).

She further said the government at the Centre is working with the objective to make India a developed nation by 2047.

"Our government's primary focus is Viksit Bharat by 2047 and Prime Minister Narendra Modi has emphasised that it can be achieved by looking after the four main 'castes' -- Women, Poor, Youth and Farmers," she said.

India's focus is also on the 'Sunrise Sectors' which are important to build our capacities and areas such as Digital Public Infrastructure (DPI) where India has emerged as a global leader, she said.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.) 🔺