Trade deal talks with US may end this year, says Economic Survey

India’s ongoing negotiations for a trade agreement with the United States are expected to conclude during the year, which could help reduce uncertainty on the external front, according to the Economic Survey 2025-26.

The Survey said global conditions currently pose external uncertainties for India rather than immediate macroeconomic stress. It noted that slower growth in major trading partners, tariff-related disruptions to trade, and volatility in capital flows could at times affect exports and investor sentiment.

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“At the same time, ongoing trade negotiations with the United States are expected to conclude during the year, which could help reduce uncertainty on the external front,” the Survey said.

"There has been progress in negotiations of the trade deal between the two countries," the Survey said.

The global economic landscape is becoming increasingly unpredictable, driven by tariff increases, supply chain adjustments, and higher regulatory hurdles, it further said.

"For Indian industries, the current wave of US tariff implementations and stricter non-tariff barriers presents a significant challenge, particularly for export-oriented sectors," it said.

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Further, it said there has been some specific impact of the tariffs, Indian exporters in some labour-intensive and small-scale sectors are showing resilience by shipping goods to alternative destinations.

India's exports to the US have declined during April-November 2025, but registered positive growth in other countries.

India and the US have been negotiating a bilateral trade agreement since March last year. So far, six rounds of talks have taken place. The negotiations have moved slowly after the Trump administration imposed steep tariffs on Indian goods from August last year.

The US had imposed a 25 per cent tariff along with an additional 25 per cent penalty on Indian goods entering the American market, citing India’s purchase of Russian crude oil.

A delegation from the Office of the US Trade Representative, led by Deputy US Trade Representative Ambassador Rick Switzer, visited India in December 2025 for trade discussions. This was the second visit by US officials since the imposition of the tariffs.