India and US Advance Bilateral Trade Talks: Key Updates

Progress in India-US Trade Negotiations

India and the United States have made significant progress toward a bilateral trade agreement after several rounds of discussions held in New Delhi from March 26 to 29. The negotiations, led by officials from India’s Commerce Ministry and a U.S. delegation headed by Assistant U.S. Trade Representative for South and Central Asia, Brendan Lynch, aimed to address key trade issues and strengthen economic ties between the two nations.

Key Objectives of the Trade Agreement

The proposed trade deal seeks to:

Resolve tariff-related disputes

Streamline regulatory frameworks

Boost trade volume to $500 billion by 2030

Enhance cooperation in key industries

With discussions still in the early stages, both nations are optimistic about finalizing the first phase of the agreement by fall 2025 (September-October).

Sector-Wise Discussions to Continue

While the initial talks have concluded, sectoral experts from both sides will engage in virtual discussions in the coming weeks to address industry-specific concerns. The final framework is expected to be developed over the next few months, allowing both countries to maximize economic benefits and investment opportunities.

India’s Stand on Tariffs and Market Access

The United States has been pushing for tariff reductions on various goods, including industrial products, automobiles, wines, petrochemicals, and agricultural items like apples, tree nuts, and alfalfa hay. In response, India has requested duty concessions on labor-intensive sectors such as textiles.

Recent Tariff Adjustments:

In February 2025, India lowered import duties on bourbon whiskey from 150% to 100%.

Tariffs on specific wines and fermented beverages were also reduced to 100%.

The customs duty on motorcycles and synthetic flavoring essences was cut, benefiting U.S. exporters.

India removed the equalization levy on tech giants like Google, further easing trade relations.

Despite U.S. pressure, India remains cautious about opening its agriculture sector, as it is a politically sensitive industry.

Reciprocal Tariffs: A Challenge for Indian Exporters

The negotiations are crucial as U.S. President Donald Trump is set to impose reciprocal tariffs on major trading partners, including India, from April 2. Indian businesses and exporters have urged the government to negotiate exemptions, as these tariffs could severely impact industries reliant on the U.S. market.

In a strategic move, India lifted retaliatory import duties on eight U.S. products in June 2023. These included chickpeas, lentils, and apples, which were previously subjected to higher tariffs in response to U.S. steel and aluminum duties in 2019.

Future Outlook: Strengthening India-US Economic Partnership

India and the U.S. are committed to deepening their trade partnership, with a strong focus on mutual economic growth. The finalization of the agreement will pave the way for increased investments, job creation, and enhanced cooperation between the two economies.

As discussions continue in the coming months, both countries aim to create a balanced trade framework that benefits businesses, consumers, and key industries. The first phase of the trade deal is expected to be completed by late 2025, marking a new era in India-U.S. economic relations.

India-US Trade Deal May Take Time, Likely by Fall 2025: Morgan Stanley

A trade deal between India and the US is expected to take time but could be completed by fall 2025, according to a Morgan Stanley report. While India faces risks from higher tariffs, it is less affected by a slowdown in global trade because its goods exports make up the smallest share of GDP in Asia.

The report also highlights uncertainty about how much tariffs on Indian exports might increase since the US has not clearly explained its plan for reciprocal tariffs. With several trade issues still unresolved, reaching a final agreement will be difficult.

Stay tuned for further updates on this evolving trade partnership!