India, US plan to negotiate trade pact, increase market access, cut duties: Govt to Parliament

New Delhi: India and the US are planning to negotiate a trade agreement and both countries will focus on increasing market access, reducing import duty and non-tariff barriers, and enhancing supply chain integration, Parliament was informed on Tuesday.

“Both countries plan to negotiate a mutually beneficial, multi-sector Bilateral Trade Agreement,” said Minister of State for Commerce and Industry Jitin Prasada in a written reply to the Lok Sabha, adding that as on date, reciprocal tariffs have not been imposed by the US on India.

The US issued Memorandum on Reciprocal Trade and Tariffs on February 13, wherein the Secretary of Commerce and United States Trade Representative are to take necessary actions to investigate harm to America from any non-reciprocal trade arrangements adopted by trading partners and provide a report with detailed proposed remedies for each trading partner.


India and the US announced their commitment to more than double the two-way commerce to $500 billion by 2030 and negotiate the first tranche of a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA) by fall of 2025 during Prime Minister Narendra Modi’s visit to Washington last month.

Prasada also said that India continues to engage with the US to achieve enhancement and broadening of bilateral trade ties in a mutually beneficial and fair manner.

“This is an ongoing exercise and Indian exporters are working towards diversifying trade baskets and export destinations,” he said.

The US has 59.11% share in India’s carpet exports, 34.5% in electronics and 16.12% in its engineering goods exports.

Tariff policy
In a separate reply, he said that Indi’s tariff policy aims to regulate trade, protect domestic industries, and generate revenue through taxes on imported and exported goods.

“Recent reforms have focused on streamlining the tariff structure and facilitating trade,” Prasada said.

“With the changing trade scenario, India is moving towards having Preferential/Free Trade Agreements wherein customs tariffs and non-tariff barriers are reduced or eliminated on substantial trade between the PTA/FTA members,” he added.
At present, India is a member of 13 FTAs and 9 PTAs apart from the negotiations with the EU, the UK, and Oman.

EU rice export
There have been a few detections of Aflatoxin, a toxic substance, in rice consignments exported from India to the EU but the country has been complying with the requirements of the importing nations, the minister said.

Prasada said that the maximum residue levels (MRLs) for 'Aflatoxin B1' for rice, has not been revised by the EU in the recent past.

“There have been a few detections of Aflatoxin...in rice consignments exported from India to the EU, however no detections have been reported for rice consignments exported by exporters of Tamil Nadu and Andhra Pradesh, in the last five years,” he said.

The minister said that as per trade data, the volume of rice exports from India to the EU has increased by 111% between 2019 and 2023, while the volume of non-Basmati rice exports has increased by 500% during the same period, which is higher than the ASEAN countries.

“India has been complying with the requirements of the importing countries, including that of the EU. However, in cases where the MRLs/ML of pesticides and contaminants have been lowered significantly, India has taken up with the concerned country and also the EU, through bilateral discussions,” Prasada said.