India eyes trade liberalisation with US; in-person talks likely to start in May

New Delhi: Indian and American officials are set to begin virtual negotiations this week on a comprehensive bilateral trade agreement (BTA), with plans to transition to in-person discussions by mid-May, senior Indian government representatives announced on Tuesday.

The ambitious trade pact aims to more than double bilateral commerce between the two nations to $500 billion by 2030, up from the current level of approximately $191 billion.

“We hope to get into a physical mode of negotiations maybe in the second half of May. So we are on schedule as far as the BTA and its negotiations are concerned,” said Rajesh Agrawal, Additional Secretary in the Department of Commerce and chief negotiator for the agreement.

Commerce Secretary Sunil Barthwal highlighted India’s commitment to trade liberalisation with the United States, noting that both countries have already signed the terms of reference (ToRs) for the pact. “There is a clear pathway which we have decided at the leaders’ level, and then subsequently meetings have been held,” Barthwal explained during a press briefing.

The two economic powerhouses have set an ambitious timeline, targeting completion of the first phase of negotiations by fall 2025, potentially as early as September-October. “If we are able to do it early, it is good for us and the US. But that will depend on the pace of negotiations,” Barthwal added.

The trade agreement would address both tariff and non-tariff barriers. The United States is expected to seek duty concessions in sectors including industrial goods, electric vehicles, wines, petrochemicals, dairy products, and agricultural items such as apples and tree nuts. India, meanwhile, may pursue duty reductions for labour-intensive sectors including textiles, apparel, gems and jewellery, leather goods, plastics, chemicals, and various agricultural products.

“Both countries will gain from this BTA and that is the assumption based on which such trade agreements are finalised and negotiated,” Barthwal stated, pointing to India’s successful trade pacts with Australia and the UAE as examples where bilateral trade has improved following similar agreements.

The United States currently stands as India’s largest trading partner, accounting for approximately 18 per cent of India’s total goods exports, 6.22 per cent of its imports, and 10.73 per cent of overall bilateral trade. India has maintained a trade surplus with the US, which stood at $35.32 billion in goods during the 2023-24 fiscal year, up from $27.7 billion in the previous year.

When questioned about potential conflicts with other ongoing trade negotiations, Barthwal assured that the ministry has built sufficient capabilities to handle multiple free trade agreements simultaneously. “What we believe is that all FTAs are important for us...it improves trade atmosphere between two countries and we are showing same earnestness for all FTAs,” he said.

Addressing concerns about discrepancies in trade deficit figures — with US President Donald Trump claiming a $100 billion deficit while India’s official data shows it under $45 billion — Barthwal clarified that “negotiations are based on the right facts, whatever is existing on the ground and the data that is being exchanged.”

The commerce secretary expressed optimism about the potential outcomes of the agreement, stating, “I expect that a lot of opportunities will come, and there will be a higher trade with the US in case this BTA materialises.”