India and the United States are gearing up to negotiate a comprehensive trade agreement aimed at boosting bilateral commerce, increasing market access, reducing tariffs and non-tariff barriers, and enhancing supply chain integration, the Centre told Lok Sabha on Tuesday.
In a written reply, Minister of State for Commerce and Industry Jitin Prasada informed the Lok Sabha that both countries are committed to negotiating a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA). He emphasized that the focus will be on expanding market access, lowering tariff and non-tariff barriers, and strengthening supply chain collaboration.
The announcement comes amid ongoing discussions between the two nations to deepen economic ties. During Prime Minister Narendra Modi’s visit to Washington last month, India and the US pledged to more than double their bilateral trade to $500 billion by 2030. They also agreed to finalize the first phase of the BTA by the fall of 2025.
In 2023, the total bilateral trade in goods and services between India and the US stood at 190.08 billion with190.08 billion, with 123.89 billion in goods and 66.19 billion in services. India’s merchandise exports to the US were 66.19 billion in services. India’s merchandise exports to the US were 83.77 billion, while imports totaled 40.12 billion, resulting in a trade surplus of 40.12 billion resulting in a trade surplus of 43.65 billion in India’s favor. The US has consistently been India’s largest trading partner since 2021.
The US recently issued a memorandum on reciprocal trade and tariffs on February 13, directing the Commerce Secretary and the US Trade Representative (USTR) to investigate the impact of non-reciprocal trade arrangements on American interests and propose remedies. However, Prasada clarified that the US has not yet imposed reciprocal tariffs on India.
Commerce Secretary Sunil Barthwal informed a Parliamentary panel on Monday that negotiations between India and the US are ongoing, and no agreement on trade tariffs has been finalized. He addressed concerns raised by US President Donald Trump’s recent claims that India had agreed to significantly reduce its tariffs.
India’s tariff policy is designed to regulate trade, protect domestic industries, and generate revenue through import and export duties. Recent reforms have focused on simplifying the tariff structure and facilitating trade. As a member of the World Trade Organization (WTO), India adheres to bound tariff rates, with applied tariffs generally lower than the maximum permissible levels.
Prasada also highlighted India’s efforts to expand its trade network through Preferential Trade Agreements (PTAs) and Free Trade Agreements (FTAs). Currently, India is part of 13 FTAs and 9 PTAs, with ongoing negotiations with the European Union, the United Kingdom, and Oman.
Key Indian exports to the US in 2023-24 included engineering goods (17.62billion), electronics (17.62 billion), electronics (10 billion), gems and jewellery (9.9billion), petroleum products (9.9billion), petroleum products (5.83 billion), textiles (4.7billion), and marine products (4.7billion), and marine products (2.5 billion).
The proposed India-US trade agreement is expected to further strengthen economic ties between the two nations, fostering greater collaboration and creating new opportunities for businesses on both sides. As negotiations progress, the focus remains on achieving a balanced and mutually beneficial outcome that addresses the interests of both countries.