India–US first tranche trade deal eyed by mid-March; tariffs may drop next week, says Goyal

Commerce minister Piyush Goyal says the first tranche of the India–US trade deal is nearly ready, while talks for a long-pending FTA with the GCC gain momentum.

• India to implement first phase of US trade deal with 18% tariff cuts soon
• Formal India-US trade agreement targeted for signing by mid-March
• India to sign FTA with Gulf Cooperation Council, reviving $179B trade ties

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India aims to sign the formal pact for the first tranche of its Bilateral Trade Agreement (BTA) with the United States by mid-March, while reciprocal tariffs on Indian goods are expected to be reduced to 18 percent earlier.

The reduction in reciprocal tariffs will be implemented after the US issues an executive order once both sides finalise the joint statement by next week, Union Commerce and Industry Minister Piyush Goyal said on February 5.

Goyal said the joint India–US statement is likely to be released and signed within the next four to five days. Following the statement, an executive order is expected shortly thereafter, bringing the 18 percent tariff reduction into force.

"Effective discussions are ongoing between India and the US. The first tranche of BTA is almost ready. In next four to five days a joint statement is expected to be signed between us and then signed... Simultaneously a formal agreement is being drafted which may take a month to a month-and-a-half," the minister said.

Calling it a milestone, Goyal said India has already entered into a record eight trade agreements, and the first tranche of the BTA with the US will soon become the ninth.

Commerce Secretary Rajesh Agrawal explained that in the case of the US, a joint statement is issued after leaders agree on a deal. Once issued, it is converted into a legal agreement.

On India’s commitment to the US on tariff reductions, Agrawal said that Indian tariff cuts require a legal framework, as they fall under MFN rates.

Since the duties levied by the US are reciprocal tariffs, they can be lowered through an executive order, while India’s tariff reductions for American goods will be implemented only after the legal agreement is signed, the secretary added.

For now, India and the US have agreed to a “framework agreement,” marking the first stage of the broader BTA.

Both sides are currently working to conclude the technical processes related to documentation.

The terms of the framework pact are expected to be merged into the broader BTA once it is finalised.

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The minister’s remarks came days after Donald Trump announced a trade deal with India following a phone call with Narendra Modi. Trump said reciprocal tariffs on Indian imports into the US would be cut from 25 percent to 18 percent with immediate effect, while India would eliminate tariffs and non-tariff barriers on US products. He also claimed New Delhi had agreed to end purchases of Russian oil.

Soon after Question Hour in the Lok Sabha on Wednesday, Goyal said India and the United States have been holding regular and intensive discussions to finalise a balanced, mutually beneficial bilateral trade agreement.

Goyal told Parliament that negotiating teams from both sides have worked closely over the past year, engaging at multiple levels to reconcile a wide range of interests. Given the scale and complexity of the talks, he said, it was natural for both countries to safeguard sensitive sectors while seeking the best possible outcome.