India-US trade deal's first phase close to being finalised

The first phase of the proposed US–India bilateral trade agreement is close to being finalised, Commerce Secretary Rajesh Agrawal said on Monday, indicating progress on key tariff-related issues.

India and the US have been holding virtual discussions on the BTA for months, Agrawal said. The agreement comprises two components-- one that will naturally take more time to negotiate, and a first tranche aimed at resolving tariff-related issues, ANI quoted him as saying.

According to Agarwal, this stage of the pact will cover both the 25 per cent reciprocal tariffs and the 25 per cent oil tariffs imposed on India. The official said a package addressing reciprocal duties and the United States’ market-access concerns is now in its final stretch, noting that “a package is nearing closure” and that “we should get a closure soon.”


The update comes as commerce and industry minister Piyush Goyal said on Sunday that India expects its free trade agreements with the US and the European Union to be “finalised soon”. Speaking at a plastics industry export awards event in Mumbai, he said, “Hopefully, the EU agreement and the US agreement will also get finalised soon, and you will be able to export larger volumes, but all these markets focus a lot on sustainability.”

India is awaiting a formal response from Washington on the bilateral trade package, the first tranche of which both sides had planned to conclude by fall. Officials have said that another round of talks is not required for now. The negotiations continue as the US prepares to impose 50% tariffs on most Indian exports from August 27, half of which is a penalty linked to India’s purchase of Russian energy. India expects these duties to affect $48.2 billion worth of goods based on 2024 export values.

The bilateral trade agreement, formally proposed in February following directives from leaders of both countries, aims to more than double trade volumes from the current USD 191 billion to USD 500 billion by 2030.

US President Donald Trump imposed a 25% tariff on Indian shipments to US along with additional penalty of 25% citing India's purchase of Russian oil.

India imports about 34% of crude oil from Russia, while about 10% of the country's current oil and gas needs are imported from the US. Trump wants India to cut down Russian oil purchases, and switch to US and its alloies for the same.