First phase of India–US trade deal nears closure; to address reciprocal tariffs: Official

The first phase of the proposed India-US bilateral trade agreement (BTA) is “nearing closure” and is expected to resolve the steep 50% tariffs imposed by the Trump administration on Indian goods, a senior government official said on Monday.

The US currently levies 25% reciprocal tariffs and an additional 25% penalty on Indian products entering its market for purchasing Russian crude oil.

“We are engaged with the US on the BTA. It has two parts. One part of negotiations will take time. The other part is a package which can address reciprocal tariffs. We are working on both aspects,” the official said.

“The package that can address reciprocal tariffs is more or less near closure and we should get it soon,” the official added.

The official said that the deal is expected to address the issue of 25% penalty on India; otherwise, the agreement would have no meaning.

He added that the first tranche of the BTA will focus largely on tariff-related issues and the pact will be announced on a mutually agreed date by both sides.

LPG import deal

The remarks followed India’s announcement of its first structured contract to import liquefied petroleum gas (LPG) from the United States.

Union Petroleum and Natural Gas Minister Hardeep Singh Puri on Monday said that state-run IndianOil, Bharat Petroleum and Hindustan Petroleum have finalised a one-year agreement to import around 2.2 million tonnes per annum (MTPA) of LPG from the US Gulf Coast for 2026.

On whether the LPG contract is linked to the trade negotiations, the official said: “It was something in the works for long. This is in the overall context of keeping the trade with the US. It is not part of any negotiations package per se but definitely part of our endeavour to balance trade with the US.”

The move is also seen as an attempt to narrow India’s trade surplus with Washington, a persistent concern for President Donald Trump, who has cited it as justification for the reciprocal tariff on Indian goods.

The US remained India’s largest trading partner for the fourth straight year in 2024-25 with USD 131.84 billion in two-way trade, including USD 86.5 billion worth of Indian exports. It accounts for nearly 18% of India’s goods exports.

However, Indian exports to the US declined 11.93% to USD 5.46 billion in September due to the tariff impact, while imports rose 11.78% to USD 3.98 billion, commerce ministry data show.

Trump recently said the US was “pretty close” to reaching a “fair trade deal” with India and indicated that tariffs on Indian goods may be lowered “at some point”.