Govt begins work on proposed trade deal with US amid Trump's tariff threats: Report

US President Donald Trump and PM Narendra Modi

The government has begun laying the groundwork for the upcoming talks on a proposed bilateral trade agreement (BTA) between India and the US, The Business Standard has reported. The move comes days after Prime Minister Narendra Modi and US President Donald Trump agreed to negotiate the first phase of the trade deal.

The commerce department has begun the preliminary talks with various departments and ministries for a deeper understanding of the sector-specific dynamics, trade intricacies, and India's "offensive interests", the report said.

Moneycontrol couldn't verify the report independently.

Departments have been asked to identify what the two sided could be demand and work on, including the extent to which India can offer tariff concessions and what can be reasonably asked from the US, the report cited officials as saying.

A meeting on the automotive industry has already been held, while those for heavy industries and other departments is scheduled next week.

Also read: A Bilateral Trade Agreement will insulate India from Trump’s tariff squeeze

The move comes even as Trump continues to talk about India’s “high tariffs”. On February 17, Trump laid out the broad contours of his new trade policy.

"I will charge a RECIPROCAL Tariff meaning, whatever Countries charge the United States of America, we will charge them - No more, no less!" he said in a post on X.

He has asked his team to start calculating duties to match those other countries charge and to counteract non-tariff barriers such as vehicle safety rules that exclude US autos and value-added taxes that increase their cost, a Reuters report said.

New tariffs are expected to kick in from early April.

Trump has on many occasion slammed India as a "very big abuser" of tariffs.

Global broking firm Citi Research has identified India’s chemicals, metal products, and jewellery as the most vulnerable to Trump’s tariffs, followed by automobiles, pharmaceuticals, and food products.

The Indian specialty chemicals sector could see an impact on profitability, it has said.

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