'Optimistic of finding a solution this year,' says Commerce Secy on first tranche of India-US trade deal

'It's only a matter of time,' says Commerce Secretary on India-US trade deal

Commerce Secretary Rajesh Agarwal said on November 28 that "it's only a matter of time" before the first phase of India-US trade deal happens.

"We have engaged on it (trade deal) for the last few months very deeply with the US team and I think all I can say is we are close, we have tried to iron out most of the issues. Now, it is only a matter of time when this decision has to be taken when the two countries have to find the right landing zone to announce the deal. And that is where we stand as of now," said Agarwal.

"We are very optimistic and very hopeful that we should find a solution within this calendar year. But as you know with any trade negotiations the final deadline cannot be...because even if there is one sticking point or issue which is in mind of even one of the partners the trade deal may not meet that deadline. Having said that, I think the overall position is well placed to deliver it in the next few weeks or months, as soon as we can," added Agarwal.

The US has imposed a 25% reciprocal tariffs and another 25% on Indian goods entering American markets for buying Russian crude oil.

"Right now we are not only engaged in negotiating a bilateral trade agreement (BTA), which will definitely take a lot of time with a country like the US, because trade agreements are very wide ranging agreements these days with a lot of issues not only market access issues that are negotiated under the umbrella. But at the same time we are also engaged in a protected negotiation on a framework trade deal, which will try to address the reciprocal tariff challenge that Indian exporters today face.

"So, these are two separate, parallel negotiations going on but one will feed into the other. What needs to come first is the framework trade deal, which will address the reciprocal tariffs. We have engaged on it for the last few months very deeply with the US team and I think all I can say is we are close, we have tried to iron out most of the issues," added Agarwal.

The US remained India’s largest trading partner for the fourth consecutive year in 2024-25, with bilateral trade valued at $131.84 billion ($86.5 billion exports). It accounts for about 18% of India’s total goods exports, 6.22% in imports, and 10.73% in the country’s total merchandise trade.

India’s merchandise exports to the US declined 11.93% to $5.46 billion in September due to the high tariffs imposed by Washington, while imports increased 11.78$ to $3.98 billion during the month, according to commerce ministry data.

Agarwal said teams of both the countries have been engaging virtually every week.

"Assumption is a trade deal will be beneficial for Indian exports only when there will be addressal of both 25 percent tariffs, including the other 25 percent tariffs that have been imposed some other geopolitical reasons. Until and unless both are addressed together it will not mean a meaningful deal for India. Whenever the deal is signed and finalised by both sides both these tariffs will be addressed. Talks are on, teams are engaging virtually every week. The visits can happen either way, we expect some visits from their side also in the near future," he said.

"I think BTA will take some time because it is like an FTA and it is expansive. And especially with the reciprocal tariffs in the play which are beyond the MFN tariffs that each country does have. I think we will need to find a pathway for complete elimination of reciprocal tariffs in our process of doing BTA. So, I think that will take a bit of time and we will not hurry up those... we are working on the various aspects of the BTA. But, let the first one come first and then we will see what are timelines we will put for the BTA," added Agarwal.