Key Takeaways
- Phase one of the India-US trade deal is “nearly closure” and will address 50% tariffs
- The first tranche of the agreement is expected to be announced in 2025
- The deal aims to boost bilateral trade to $500 billion by 2030
The first phase of the India-US bilateral trade agreement is nearing completion, according to Commerce Secretary Rajesh Agarwal. The initial package will address the contentious 50% tariffs and improve market access between the two nations.
Speaking on November 17, Agarwal confirmed that negotiations are progressing regularly, with both countries working toward a mutually agreed announcement date for the finalized deal.
Current Status of India-US Trade Agreement
The bilateral trade agreement is being negotiated in two distinct parts. While the second phase will require more time, the initial package focusing on reciprocal tariffs is “more or less near closure.”
Commerce Secretary Agarwal stated: “We are engaged with the US on the BTA. It has two parts. One part of negotiations will take time. The other part is a package which can address reciprocal tariffs. We are working on both aspects. The package that can address reciprocal tariffs is more or less near closure and we should get it soon.”
Outstanding Issues Under Discussion
Several key matters remain under negotiation, including a potential year-long LPG cooking gas import deal between Indian oil companies and US suppliers for 2026. While not formally part of the negotiation package, this arrangement supports broader trade balancing efforts.
The United States is also pushing for enhanced market access for several agricultural products, including almonds, pistachios, apples, ethanol, and genetically modified commodities.
Impact on Trade Balance
The proposed LPG agreement is viewed as a strategic move to reduce India’s trade surplus with the United States. To date, six official negotiation rounds have been completed, with both nations targeting 2025 for announcing the first agreement tranche.
Recent trade data highlights the significance of this relationship:
- Bilateral trade reached $191 billion currently, with targets set at $500 billion by 2030
- The US remained India’s largest trading partner for the fourth consecutive year in FY25
- Bilateral trade valued at $131.84 billion in FY25 ($86.5 billion in exports)
- The US accounts for 18% of India’s total goods exports
The agreement comes at a critical time, as India’s merchandise exports to the US declined by 11.93% to $5.46 billion in September 2025, largely due to existing high tariffs. Meanwhile, imports from the US increased by 11.78% to $3.98 billion during the same period.
