India, US to expand trade, cut barriers, target $500 billion commerce by 2030

NEW DELHI: India and the US are set to negotiate a multi-sector Bilateral Trade Agreement (BTA), aiming to enhance market access, reduce tariff and non-tariff barriers, and integrate supply chains, Parliament was informed on Tuesday.

In a written reply to the Lok Sabha, Minister of State for Commerce and Industry Jitin Prasada said that as on date, reciprocal tariffs have not been imposed by the US on India.

He said that both countries will focus on increasing market access and reducing import duties. He told the Lok Sabha that the move signals a strategic effort to boost economic ties.

Despite the US recently announcing reciprocal tariffs on trading partners, Prasada also clarified that these levies have not yet been applied to India.

The minister underscored the ongoing discussions, noting that Indian exporters are diversifying trade baskets and exploring new markets to strengthen bilateral trade relations. The commitment to broadening economic engagement was reaffirmed through a joint statement issued on February 13 following discussions between Prime Minister Narendra Modi and US President Donald Trump in Washington.

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 negotiations come amid ambitious plans under ‘Mission 500,’ an initiative unveiled during Modi’s recent US visit. This initiative aims to more than double two-way trade between India and the US, targeting a milestone of $500 billion by 2030, the MoS Commerce said.

In 2023, bilateral trade in goods and services between the two nations stood at $190.08 billion, with India’s merchandise exports to the US amounting to $83.77 billion and imports standing at $40.12 billion, creating a trade surplus of $43.65 billion in India’s favour.

The US has remained India’s largest trading partner between 2021 and 2024. The government also mentioned that India’s key exports to the US in 2023-24 included engineering goods worth $17.62 billion, followed by electronics ($10 billion), gems and jewellery ($9.9 billion), petroleum products ($5.83 billion), textiles ($4.7 billion), and marine products ($2.5 billion).

Meanwhile, Commerce Secretary Sunil Barthwal, while addressing a parliamentary panel, stated that India has not yet committed to reducing import duties on US products. This statement comes after President Trump claimed that India had agreed to significantly lower tariffs. Barthwal emphasised that trade negotiations are still in progress, and any conclusions should not be drawn from media reports or presidential statements.

The US issued a Memorandum on Reciprocal Trade and Tariffs on February 13, directing its Secretary of Commerce and the United States Trade Representative to investigate the impact of non-reciprocal trade arrangements and recommend appropriate remedies. However, Prasada highlighted that India’s tariff policy remains focused on regulating trade, protecting domestic industries, and generating revenue while also progressively streamlining tariff structures to facilitate trade. As a member of the World Trade Organization (WTO), India ensures that applied tariffs generally remain below the bound tariff levels.

India continues to actively engage in free and preferential trade agreements to enhance global trade integration. Currently, the country is part of 13 Free Trade Agreements (FTAs) and nine Preferential Trade Agreements (PTAs), alongside ongoing negotiations with the European Union, the United Kingdom, and Oman. With the evolving global trade landscape, India’s strategy is shifting towards expanding preferential trade arrangements while safeguarding its economic interests.

As negotiations for the BTA move forward, both India and the US are poised to shape a more comprehensive and mutually beneficial trade framework that aligns with their shared economic aspirations.

“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,” Prasada added.

At present, India is a member of 13 FTAs and 9 PTAs apart from the negotiations with the EU, the UK, and Oman.