Will India and the US Seal a Trade Pact by June? Insights from Ongoing Negotiations

As India prepares for crucial trade discussions with the US next month, there are high hopes for an interim trade agreement by June 25. With both nations aiming to enhance their economic ties, the negotiations could pave the way for significant changes in tariffs and trade policies. India's chief negotiator recently concluded talks in Washington, while the US remains India's largest trading partner. This article delves into the details of the ongoing negotiations, the sectors involved, and the potential impact on bilateral trade, which both countries aim to double by 2030. Stay tuned for insights on how these developments could reshape the trade landscape.
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Will India and the US Seal a Trade Pact by June? Insights from Ongoing Negotiations

Upcoming Trade Talks Between India and the US


New Delhi: A delegation of US officials is set to visit India next month to engage in trade discussions, with expectations of reaching an interim trade agreement by June 25, according to informed sources.


Sources indicated, "Negotiations are progressing well. Everything is on schedule."


Rajesh Agrawal, India's chief negotiator and Special Secretary in the Department of Commerce, recently wrapped up a four-day trip to Washington, where he discussed the proposed agreement with his US counterpart.


During the same week, Commerce and Industry Minister Piyush Goyal was in Washington to advance the trade discussions, meeting US Commerce Secretary Howard Lutnick on two occasions.


Both nations are aiming for an interim trade deal prior to the initial phase of the proposed bilateral trade agreement (BTA), especially since the US's 26% reciprocal tariff on Indian goods is suspended until July 9. This tariff was initially imposed on April 2, but Indian products still face a 10% baseline tariff from the US.


In the interim agreement, India is advocating for a complete exemption from the 26% reciprocal tariff on its goods.


A deadline has been established for concluding the first phase of the proposed BTA by fall (September-October) this year.


For the fourth consecutive year, the US has maintained its position as India's largest trading partner, with bilateral trade reaching USD 131.84 billion in 2024-25. The US represents approximately 18% of India's total goods exports, 6.22% of imports, and 10.73% of the overall merchandise trade.


India enjoyed a trade surplus of USD 41.18 billion with the US in goods for 2024-25, compared to 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 expressed concerns regarding this expanding trade deficit.


Both countries aspire to more than double their bilateral trade to USD 500 billion by 2030.


A report from the finance ministry suggests that a successful US-India bilateral trade agreement could transform current challenges into opportunities, facilitating new market access and boosting exports.


To enhance bilateral trade, India is pursuing duty concessions for labor-intensive sectors such as textiles, gems and jewelry, leather goods, garments, plastics, chemicals, shrimp, oilseeds, grapes, and bananas in the proposed agreement with the US.


Conversely, the US is seeking duty concessions in areas like certain industrial goods, automobiles (especially electric vehicles), wines, petrochemical products, dairy, and agricultural items including apples, tree nuts, and genetically modified (GM) crops.


While the import of GM crops from the US remains a contentious issue due to India's regulatory framework, New Delhi is open to importing non-GM products such as alfalfa hay, a type of cattle feed.


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