India and US on the Brink of a Major Trade Agreement: What’s Next?
Progress in India-US Trade Negotiations
New Delhi: On Monday, Piyush Goyal, the Minister of Commerce and Industry, announced that India and the United States are making significant progress in their negotiations for a bilateral trade agreement.
Goyal informed reporters that India has successfully concluded free trade agreements with three nations from the Five Eyes intelligence alliance—Australia, the UK, and New Zealand. The remaining members are the US and Canada.
He also mentioned that discussions with Canada regarding a bilateral trade agreement are set to resume soon. Goyal emphasized that this move highlights India's increasing strategic significance in global geopolitics.
His positive remarks follow recent discussions between Indian officials and a US delegation led by Deputy Trade Representative Rick Switzer in Delhi earlier this month.
Commerce Secretary Rajesh Agrawal previously stated that India is nearing the completion of an initial framework deal with the US, which aims to reduce reciprocal tariffs.
"We are very close to finalizing the initial framework deal, but I prefer not to set a timeline for it," Agrawal remarked during a press conference on December 15. He noted that six rounds of discussions have already taken place, addressing both a Bilateral Trade Agreement (BTA) and an interim arrangement to lower tariffs.
Agrawal expressed optimism that an interim agreement to reduce high tariffs on a majority of Indian exports is likely.
Goyal reiterated that the ongoing trade discussions with the US are progressing positively, but he ruled out any deadlines for finalizing a deal.
Regarding Switzer's recent two-day visit to Delhi, Goyal stated, "We had very productive discussions. However, I have made it clear that a deal is only finalized when both parties benefit. Negotiating under pressure can lead to mistakes."
Agrawal mentioned that both sides exchanged insights on various aspects of India-US trade relations, including the ongoing negotiations for a mutually advantageous Bilateral Trade Agreement.
Recently, US President Donald Trump remarked that his conversations with Prime Minister Narendra Modi were "going great," hinting at a potential visit to Delhi next year.
Trump indicated plans to "lower tariffs" imposed on India "at some point," suggesting that a breakthrough in trade discussions could be imminent.
Nonetheless, India has firmly stated that it will not compromise the interests of its farmers, dairy sector, and workers in any trade agreements with other nations.
India has also begun increasing its imports of oil and gas from the US, aiming to address the trade surplus issue that has been a topic in previous negotiations.
In this regard, Hardeep Singh Puri, the Minister of Petroleum and Natural Gas, announced that India's public sector oil companies have finalized a one-year structured contract to import approximately 2.2 million tonnes of LPG annually from the US Gulf Coast during 2026. This contract accounts for nearly 10% of India's yearly LPG imports and marks the first structured LPG agreement with the US for the Indian market. Puri described this decision as a "historic development," highlighting the opening of one of the world's largest and fastest-growing LPG markets to the United States.