Amid India-New Zealand FTA, Piyush Goyal drops big signal on India-US trade pact

India is in advanced discussions with the United States on a trade agreement, Commerce and Industry Minister Piyush Goyal said on December 22, as a breakthrough is awaited in long-drawn negotiations even as New Delhi has sealed FTAs with other nations.

Goyal made the remarks in New Delhi while briefing the media after the conclusion of the India-New Zealand free trade agreement (FTA).

Backing the minister's comments, Commerce Secretary Rajesh Agrawal had earlier this month said that India is "very close" to finalising an initial framework deal with the US aimed at lowering reciprocal tariffs.

"We are very close to closing the initial framework deal, but I don't want to put a timeline to it," Agrawal had said in a December 15 presser. He added that India and the US have completed six rounds of talks, covering both a Bilateral Trade Agreement (BTA) and an interim arrangement to reduce reciprocal tariffs.

There is a reasonable expectation that the two countries will reach an interim agreement to lower steep tariffs on most Indian exports, Agrawal said. He noted that the recent visit by the Deputy US Trade Representative was aimed at reviewing bilateral trade ties and assessing progress on both the BTA and the framework deal.

Amid anticipation of a deal with Washington, India is also looking to deepen its economic footprint in the Indo-Pacific, with Goyal expressing confidence that the FTA with New Zealand will help strengthen regional trade ties.

The New Zealand pact marks India's third free trade agreement with the Five Eyes countries, after Australia and the UK. "We will soon begin discussions on the terms of reference with Canada, and we are already at an advanced stage of discussions with the US," Goyal said.

Under the India-New Zealand FTA, India will gain 100% market access for goods and enhanced entry into a wide range of services sectors, including audio-visual, tourism, IT, telecommunications and construction. The agreement opens 118 services sectors, with both sides seeing potential to double bilateral trade over the next five years.

For Indian pharmaceutical companies, the pact introduces a fast-track approval mechanism, improving access to New Zealand's market for medicines and drugs. The two countries have also agreed on mutual recognition of good manufacturing practices, meaning products approved by regulators in India, the US, the UK, the EU or Canada will receive faster clearance in New Zealand.