India ‘very close’ on framework deal with US to cut reciprocal tariffs, but won't like to...: Commerce Secretary

India is “very close” to finalising an initial framework trade deal with the United States to lower reciprocal tariffs, Commerce Secretary Rajesh Agrawal said on Monday, even as negotiations continue in parallel on a comprehensive bilateral trade agreement (BTA).

India and the US are currently holding two parallel tracks of negotiations — one on a framework or interim deal to address high tariffs, and another on a full-fledged BTA.

The new US Deputy Trade Representative Rick Switzer was in New Delhi last week for trade talks with Agrawal.

During his visit, both sides took stock of bilateral trade relations and reviewed the progress of negotiations of the framework deal and the comprehensive BTA.

"We are very close on the framework deal, which we feel can be done in a short period of time. But I would not like to put a time period on that," Agrawal told reporters.

“There’s a fair expectation that both countries will be able to agree to a deal to lower reciprocal tariffs,” Agrawal said.

On whether more formal rounds of talks would be held on the BTA, the secretary said negotiations in the final stages normally do not require structured rounds.

There may not be a formal round, but both physical and virtual meetings will take place close to completion, the secretary noted.

“We are moving in that zone and are working tirelessly to see as fast as we can,” he said.

Drawing a parallel with ongoing negotiations with New Zealand, Agrawal said once talks enter the closing phase, discussions often happen on a near-daily basis rather than through formal rounds.

“Last stage (talks) are like the most difficult things where maybe the principals need to take a call at the secretary or minister level,” he noted.

On negotiations with the European Union, Agrawal said India and the bloc are “narrowing down the differences”. “There is a set of differences on the table where we are not able to agree...we are virtually engaged...These discussions are (happening) on a regular basis,” he said.

Indian industry and exporters are keenly awaiting the conclusion of the India-US negotiations, as elevated US import duties have hurt shipments to America.

While exporters are exploring alternative markets, the US remains India’s single-largest export destination, accounting for about 18% of total outbound shipments.

The US had earlier imposed a 25% duty on Indian goods, citing trade deficit concerns, followed by an additional 25% penalty linked to India’s purchases of Russian crude oil.

India has said resolution of these tariffs would be key to firming up the first phase of the trade deal.

The US remained India’s largest trading partner for the fourth consecutive year in 2024-25, with bilateral trade valued at USD 131.84 billion, including exports worth USD 86.5 billion. The US accounts for about 18% of India’s total goods exports, 6.22% of imports and 10.73% of total merchandise trade.

India’s merchandise trade deficit narrowed to a five-month low of USD 24.53 billion in November, aided by lower gold, oil and coal imports and a pickup in exports to the US.

Earlier this month, US Trade Representative Jamieson Greer said Washington had received the “best ever” offers from India on the proposed trade agreement, though he flagged resistance in India on certain US agricultural products such as corn, soybeans, wheat and cotton.

“The visit of the Deputy USTR was to take stock of our trade relations and to see where we are on the BTA as well as the framework deal,” Agrawal said.