Tag: GlobalTrade

US-India Trade Deal: Key Takeaways from April 23 Talks

India and the United States have finalised the terms of reference (ToRs) for a proposed bilateral trade agreement, encompassing around 19 chapters covering key areas such as goods, services, customs facilitation and more, PTI reported on Saturday, citing official sources.

The two countries are currently engaged in intensive negotiations and are aiming to conclude the first phase of the agreement by the fall of this year.

An Indian official delegation led by Rajesh Agrawal, Additional Secretary in the Department of Commerce, is scheduled to visit Washington next week for the first round of in-person negotiations. The three-day talks will begin on April 23.

The scheduled visit follows a recent trip by a high-level US delegation to India to finalise a Bilateral Trade Agreement (BTA).

During Prime Minister Narendra Modi’s visit to Washington in February, both sides agreed to pursue a comprehensive BTA with the target of doubling bilateral trade to USD 500 billion by 2030.

The two sides are looking to leverage a 90-day suspension of additional tariffs announced by US President Donald Trump. Officials indicated that some parts of the BTA could be concluded within this window, potentially finalising what are being described as “low hanging fruits.

Lot of possibilities are there to finalise form and shape of the BTA,” a senior official said, adding that “everything is possible in 90 days” if the deal proves to be mutually beneficial.

On April 15, Commerce Secretary Sunil Barthwal had stated that India will try to close the negotiations as quickly as possible with the US.

He also stated that India has decided to follow the trade liberalisation path with the US.

Trade agreements typically involve reducing or eliminating customs duties and easing rules for services and investments.

While the US is seeking duty concessions in areas such as industrial goods, electric vehicles, wines, petrochemicals, dairy, and agricultural products like apples and tree nuts, India is expected to push for relief in labour-intensive sectors such as textiles, gems and jewellery, leather, and horticulture.

Between 2021-22 and 2024-25, the US was India’s largest trading partner, accounting for nearly 18% of its goods exports and 10.73% of bilateral trade. In 2024-25, India registered a goods trade surplus of USD 41.18 billion with the US, up from USD 35.32 billion in 2023-24.

To address the widening trade gap and support US manufacturing, President Trump on April 2 announced sweeping tariffs, including a 26% duty on Indian products, only to pause them for 90 days.

India’s top exports to the US in 2024 included drug formulations and biologicals (USD 8.1 billion), telecom instruments (USD 6.5 billion), and precious stones (USD 5.3 billion), while key imports were crude oil (USD 4.5 billion), petroleum products (USD 3.6 billion), and coal (USD 3.4 billion).

India’s Strategy Against Trump’s Tariffs: Minister’s Assurance

Union Finance Minister Nirmala Sitharaman on Thursday took a veiled dig at Donald Trump’s new tariff rules but assured that India will navigate these ‘global disruptions’ with its policies.

Speaking at an event organised by the BSE in Mumbai, Sitharaman said India will work its way out of these global disruptions.

“We will navigate global disruptions with policy agility and long-term investments,” she said.

Taking a veiled dig at the tariff policies introduced by the US, the finance minister warned that they could ‘disrupt’ the global supply chain policy.

“Rise of protectionist policies have the potential to disrupt global supply chains, increase production costs,” Sitharaman said.

Donald Trump on April 2 imposed a slew of reciprocal tariffs on almost all countries around the world, including India. As per the new trade policy, most Indian imports at the US will be taxed at 26 per cent. However, Trump offered a grace period of 90 days for the policy to kick in so that countries except China could negotiate with the US.

Trump said that the policies are aimed at making more companies shift their manufacturing bases to the US, which will in turn benefit Americans and create thousands of jobs.

However, economists and experts have warned of a possible inflation in the US that could spill over and result in a broader recession.

FM Warns of Challenging Environment

The finance minister further revealed that recalibration efforts on trade were ‘very challenging.’

“The recalibration efforts on trade are very, very challenging,” Nirmala Sitharaman said at the event to mark 150 years of BSE.

The finance minister said India’s financial markets have shown remarkable resilience despite recent global uncertainties and appreciated retail investors’ faith in the markets.

Domestic institutional investors’ (DIIs) transition from being supportive to dominant roles in Indian markets underlines the growing maturity and depth of India’s capital market.

Stock markets globally have faced turmoil ever since US President Donald Trump announced sweeping tariffs on most nations, including India earlier this month. The markets recovered some ground after the US government announced a 90-day pause on implementation of the reciprocal tariff.