India and US Take Major Steps Towards Bilateral Trade Agreement: What’s Next?

India and the US have made significant strides in finalizing the Terms of Reference for their Bilateral Trade Agreement. US Trade Representative Jamieson Greer emphasized the importance of these negotiations in achieving a balanced trade relationship. With a focus on reducing tariffs and enhancing market access, both nations aim to create new opportunities for their workers and businesses. This agreement comes after a decade since a US vice president last visited India, marking a pivotal moment in their trade relations. The negotiations are set to conclude the first phase by fall 2025, addressing key trade barriers and fostering mutual benefits.

By Narendra Chaudhary Apr 22, 2025, 12:33 IST

Progress in India-US Trade Negotiations

New Delhi: The United States and India have reached an agreement on the Terms of Reference, which will guide the discussions for the proposed Bilateral Trade Agreement (BTA), as announced by US officials.

According to US Trade Representative (USTR) Jamieson Greer, these negotiations aim to create a balanced trade environment by expanding market access for American products and addressing practices detrimental to US workers.

Greer expressed optimism about the constructive dialogue with India, stating, "I look forward to generating new opportunities for workers, farmers, and entrepreneurs in both nations."

He confirmed that the USTR and India's Ministry of Commerce and Industry have established the roadmap for reciprocal trade negotiations.

Greer highlighted a significant imbalance in the current trade relationship with India.

On Monday, both nations reported substantial advancements in their discussions for a mutually advantageous trade agreement, following talks between Prime Minister Narendra Modi and US Vice President JD Vance.

Vance's visit marks the first by a US vice president to India in 12 years, following Joe Biden's trip to New Delhi in 2013.

The two countries had previously announced their intention to negotiate the BTA on February 13, aiming to complete the initial phase of the agreement by this fall (September-October).

The USTR noted that the US seeks to enhance market access, lower tariffs and non-tariff barriers, and negotiate a comprehensive set of commitments for long-term advantages.

The US has identified significant trade barriers with India, resulting in a USD 45.7 billion goods trade deficit in 2024, reflecting a 5.1 percent increase from 2023.

The US acknowledged India's tariff reductions during Modi's meeting with President Trump in February and its readiness to further decrease tariffs on American goods as part of the BTA.

In 2024, total goods trade between the US and India was estimated at USD 129.2 billion. India's average applied tariff stands at 17 percent, one of the highest among major economies, while the US average is only 3.3 percent.

For agricultural products, India's average tariff is 39 percent compared to the US's 5 percent.

The US statement also pointed out that technical and regulatory barriers, along with restrictions in services, industrial, and agricultural sectors, hinder US exports to India.

On April 2, President Trump enacted a 10 percent tariff on all countries and imposed higher tariffs on nations with significant trade deficits to create a fairer trading environment.

The announcement of the Terms of Reference with India is seen as a pivotal move towards achieving reciprocal trade with a key strategic partner, benefiting the American populace.

The ToRs encompass various issues, including tariffs, non-tariff barriers, rules of origin, and customs facilitation.