India and US on the Brink of Finalizing Trade Agreement: What’s Next?

Progress in India-US Trade Negotiations

New Delhi: India and the United States are nearing the completion of their proposed bilateral trade agreement, as confirmed by Commerce Secretary Rajesh Agrawal on Monday. He emphasized that both countries are deeply involved in ongoing negotiations.

Currently, two separate discussions are taking place: one focusing on a framework trade deal aimed at reducing high tariffs, and the other on a comprehensive bilateral trade agreement (BTA).

Last week, the new US Deputy Trade Representative, Rick Switzer, visited India for discussions with Agrawal regarding trade matters.

During this visit, both parties assessed the state of their trade relations and reviewed the progress made on the framework deal and the comprehensive BTA.

"We are very close to finalizing the framework deal, which we believe can be completed soon. However, I prefer not to specify a timeline," Agrawal stated to the media.

When questioned about the possibility of additional formal rounds for the BTA, he mentioned that discussions in the final stages typically do not require such rounds.

While formal rounds may not occur, both in-person and virtual meetings will be scheduled as the negotiations approach completion, he added.

"We are progressing in that direction and are working diligently to expedite the process," he remarked.

Agrawal cited the ongoing negotiations with New Zealand as an example, explaining that once discussions reach a certain point where only a few issues remain, formal rounds are often unnecessary.

Regarding New Zealand, he noted, "We are nearing a resolution," with talks occurring daily.

"The final stages of negotiations can be quite challenging, often requiring decisions at the secretary or ministerial level," Agrawal explained.

In relation to the European Union, he mentioned, "We are working to narrow down the differences."

"There are still some unresolved issues on the table, but we are engaged in regular discussions," he added.

These negotiations are crucial, especially since the previous US administration imposed a hefty 50% tariff on Indian goods entering the American market. The outcomes are expected to positively impact the rupee, which has recently hit record lows and crossed the significant 90-to-a-dollar threshold.

Indian industries and exporters are keenly awaiting the conclusion of these negotiations, as the elevated import duties are adversely affecting their shipments to the US.

While they are exploring alternative markets to sustain their export revenues, the US remains a vital destination, accounting for approximately 18% of India's exports.

Initially, the US imposed a 25% duty on Indian goods, citing concerns over the trade deficit with India, which was around USD 46 billion in 2024-25. An additional 25% penalty was later imposed due to India's purchase of Russian crude.

India has indicated that resolving these tariffs is essential for solidifying the first phase of the trade agreement.

As part of the negotiations, the US is seeking tariff concessions on agricultural products such as almonds, corn, and apples, as well as industrial goods. However, India has firmly opposed any concessions in the agricultural and dairy sectors, asserting that it will not compromise the interests of its farmers and MSMEs.