A successful agreement could set the tone for future economic relations between the two countries.
New Delhi/Washington: India and the United States are preparing to negotiate a Bilateral Trade Agreement (BTA) that could significantly enhance trade ties between the two nations. The move comes as US President Donald Trump pushes for reciprocal tariffs on trading partners, including India.
During a weekly briefing, Ministry of External Affairs (MEA) spokesperson Randhir Jaiswal emphasized that the agreement aims to expand market access, lower trade barriers, and strengthen supply chain integration between India and the US.
"Both governments are advancing discussions on a multi-sector Bilateral Trade Agreement to enhance two-way trade in goods and services, reduce tariff and non-tariff barriers, and deepen economic cooperation," Jaiswal stated.
The negotiations follow Prime Minister Narendra Modi’s visit to the US in February 2025, where both leaders agreed to work towards a comprehensive trade pact. Additionally, Commerce and Industries Minister Piyush Goyal met with his US counterparts to accelerate discussions.
A Strategic Move in India-US Trade Relations
A BTA between India and the US could have far-reaching economic implications, considering India’s trade agreements with over 50 countries, including the Asia-Pacific Trade Agreement and the South Asia Free Trade Agreement (SAFTA).
While India seeks greater market access for its goods and services, the US is likely to push for increased agricultural exports and lower tariffs on American goods. A successful agreement could set the tone for future economic relations between the two countries.
Trump’s Tariff Threats and the Need for a Trade Deal
The trade negotiations come against the backdrop of President Trump’s recent remarks targeting India’s import duties, particularly in the automobile sector. Addressing a joint session of Congress, Trump criticized India's over 100% tariffs on US auto imports and announced a reciprocal tax policy set to take effect on April 2.
"For decades, the US has been taken advantage of by nearly every country on Earth. We will no longer let that happen. Nations like India, the European Union, China, Brazil, Mexico, and Canada impose significantly higher tariffs on us than we do on them. That is unfair," Trump declared.
The US President’s protectionist stance and tariff threats have heightened tensions, making the BTA negotiations even more crucial for stabilizing trade relations between India and the US.
As discussions progress, the global business community will closely watch the outcomes of the trade talks, as they could reshape economic engagement between the world’s two largest democracies.
