India’s trade deal with the European Union has entered the final phase of negotiations, while it is also moving closer to finalising the first tranche of a broader Bilateral Trade Agreement (BTA) with the United States, focusing on scaling back tariffs currently at 50 percent.
Commerce Secretary Rajesh Agarwal on November 17 said that India continues to engage with the US on all matters related to the trade deal, including reciprocal tariffs.
The 50 percent tariff imposed by the US includes reciprocal duties of 25 percent and a ‘penal’ levy of 25 percent, the latter being on account of India’s imports of crude from Russia.
The talks are focused on scrapping the ‘additional’ 25 percent and reducing the original 25 percent reciprocal tariff.
Agarwal added that India’s Free Trade Agreement (FTA) with the European Union has entered its final phase, though the concluding leg of negotiations is typically time-consuming, while the fourth round of talks with Chile is likely to take place in December.
India and the European Union aim to conclude talks for the FTA by the end of 2025. Both sides have narrowed differences in key areas, especially after a negotiating team from the EU visited New Delhi from November 3 to 7 for discussions on the proposed FTA. During the talks, the two parties agreed to further accelerate efforts toward a balanced trade pact.
Negotiations for the trade deal with New Zealand are also in the final phase, while a fresh round of discussions is expected in December on the ongoing review of the ASEAN FTA, he said.
“One part is the overall BTA negotiations (with the US), which will take time. The BTA will have multiple tranches. The first tranche will be a package that will address reciprocal tariffs and others, which is near closure,” a senior commerce ministry official said.
India and the US have completed six rounds, since talks began in March, on the proposed BT,A with the latest one held in Washington between October 15-17, the commerce ministry said on November 17.
Most Indian exports are currently subject to a 50 percent US tariff, with an additional 25 percent kicking in from August 27, linked to New Delhi’s crude oil purchases from Russia.
India’s merchandise trade deficit widened to $41.68 billion in October, up from $32.15 billion in September, driven by a surge in gold and silver imports and a drop in exports to the United States.
Indian exports to the US fell nearly 9 percent in October to $6.31 billion from $6.91 billion a year ago, while it increased from $5.47 billion in September, data released by the Commerce Ministry showed.
According to the government’s estimate, Indian exports worth roughly $48.2 billion are facing elevated US tariffs.
India exported goods worth $86.51 billion to the US in FY25, out of which the top five categories account for almost $60 billion of outbound shipments to American shores.
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