India, US want to expedite talks for proposed trade agreement

Both India and the US want to expedite the negotiations for the proposed bilateral trade agreement (BTA) as the two countries are looking at promoting two-way commerce, an official statement said on Thursday.

Both countries have decided to hold sector-specific talks this month to finalise the structure of the agreement.

"Discussions are ongoing between Indian and US trade teams for the expeditious conclusion of a mutually beneficial, multi-sectoral BTA...We remain in touch with the Trump administration on these issues and expect to take them forward in the coming days," the commerce ministry said.

Through the agreement, the two countries are looking to increase market access for their goods, cut tariff and non-tariff barriers and deepen supply chain integration.

A team of US officials, headed by Assistant US Trade Representative for South and Central Asia Brendan Lynch, was here last month to finalise the contours and terms of references of the proposed pact, aimed at more than doubling the bilateral trade to $500 billion by 2030 from the current $191 billion.

Though the two sides have set a deadline to conclude the first phase of the agreement by the fall (September-October) of this year, the complex nature of negotiations for a trade pact may extend the process for years.

A government official said India was the only country where the Trump administration had sent its team for trade talks.

The official expressed hope that India would be able to navigate the additional 27% import duty announced by the US starting from April 9.

"With the BTA in the pipeline, we are in a zone where we should not be overtly worried about these tariffs," the official added.

When asked if issues like rules of origin are to be part of the pact, the official said the BTA will have elements like any other trade agreement.

"We have been progressing well," the official added.

In a trade pact, two countries either significantly reduce or eliminate customs duties on the maximum number of goods traded between them. They also ease norms to promote trade in services and boost investments.

While the US has demanded duty concessions in sectors like certain industrial goods, automobiles, wines, petrochemical products, dairy, agriculture items such as apples, tree nuts, and alfalfa hay; India may look at duty cuts for labour-intensive sectors like textiles.

"India has an early-mover advantage. It is engaged with them deeply for the BTA. We are progressing on that. A lot of work has been done. We are ahead of the curve," the official said.

In 2024, India's main exports to the US included drug formulations, biological ($8.1 billion), telecom instruments ($6.5 billion), precious and semi-precious stones ($5.3 billion), petroleum products ($4.1 billion), gold and other precious metal jewellery ($3.2 billion), ready-made garments of cotton including accessories ($2.8 billion), and products of iron and steel ($2.7 billion).

Imports included crude oil ($4.5 billion), petroleum products ($3.6 billion), coal, coke ($3.4 billion), cut and polished diamonds ($2.6 billion), electric machinery ($1.4 billion), aircraft, space crafts and parts ($1.3 billion), and gold ($1.3 billion).

In 2023-24, the US was the largest trading partner of India with $119.71 billion bilateral trade in goods ($77.51 billion worth of exports, $42.19 billion of imports, with $35.31 billion trade surplus).

India has received $67.8 billion in foreign direct investments from America between April 2000 and September 2024.