India is pursuing a dual-track approach with the United States, with negotiations underway on both a broad Bilateral Trade Agreement (BTA) and a more focused framework deal to address reciprocal tariff challenges faced by Indian exporters, Commerce Secretary Rajesh Agarwal said on November 28.
The framework pact to address steep reciprocal tariffs on India is expected to move first, possibly by end-2025, and later feed into the broader BTA, which Agarwal said will take longer due to its wider scope.
“We are very optimistic and very hopeful that we should find a solution within this calendar year (with regard to the first tranche of the BTA). 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,” Agarwal said.
He said that the first tranche of the deal with the US is largely on track and could be delivered within weeks or months, though the final decision will need approval at multiple levels.
According to him, negotiators are close to a point where the agreement can be wrapped up soon, as only a few issues remain and some of them require a political call.
"We have engaged on it (the first tranche of the 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," he said.
However, the broader BTA will take longer, Agarwal said, since it is similar in scale to a free trade agreement and due to the involvement of complex issues like reciprocal tariffs that go beyond MFN duties.
"India and its partner will need to work out a pathway to fully remove these reciprocal tariffs, and the process should not be rushed. Work is ongoing across different elements of the BTA, but the priority is to conclude the initial agreement first before setting timelines for the broader pact," he added.
The US has imposed a 25 percent reciprocal tariff on most Indian goods, along with an additional 25 percent duty related to New Delhi’s purchase of 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,” Agarwal explained.
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 percent of India’s total goods exports, 6.22 percent in imports, and 10.73 percent in the country’s total merchandise trade.
Agarwal said teams from both countries have been holding virtual discussions 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 due to some other geopolitical reasons. Until and unless both are addressed together it will not be a meaningful deal for India,” the secretary said.
He also cautioned that in any trade negotiation, India firmly protects its own sensitivities and unique economic interests. "There are certain areas that are simply non-negotiable for the country, and partners engaging with India understand clearly which issues cannot be committed to or placed on the table, whether it is with the US or any other nation."
India and the US have completed six rounds, since talks began in March, on the proposed BTA with the latest one held in Washington between October 15-17, the commerce ministry said on November 17.
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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