India and US Plan Wrap-Up Session on Proposed Trade Pact

India and US officials are scheduled to hold a wrap-up session on Saturday morning to finalize discussions from a three-day meeting regarding a proposed bilateral trade agreement, according to sources in the government.

These discussions are still considered to be in the very early stages.

A delegation from the US, led by Assistant US Trade Representative for South and Central Asia, Brendan Lynch, is currently in New Delhi to negotiate the terms of this proposed pact.

One source noted that discussions are ongoing but that no agreements have been finalized yet.

Commerce and Industry Minister Piyush Goyal commented on Thursday that talks between India and the US are progressing positively and are expected to bring benefits to both countries while ensuring India's interests are maintained.

This round of discussions is significant, especially after US President Donald Trump announced reciprocal tariffs on several nations, including India, in early April. Trump has mentioned on various occasions that India imposes high tariffs on American goods, a point of contention that the US has already taken action on concerning China.

Furthermore, the Trump administration has imposed 25% import duties on steel and aluminum since March 12 and announced a 25% tariff on fully assembled vehicles (CBUs) and auto parts, which will take effect soon.

In the context of tariffs, it is important to understand that these are import duties collected by the government and must be paid by companies in order to bring foreign goods into the country.

The objective of the India-US talks includes completing the first phase of the agreement by the fall of 2025 and doubling the current bilateral trade from over $190 billion to $500 billion by 2030.

While the US is seeking duty concessions on various sectors, including industrial goods, automobiles, wines, petrochemical products, and agricultural items like apples and almonds, India is looking into possible duty reductions for labor-intensive sectors such as textiles.

Indian industries and exporters have urged the government for assistance in protecting them against US tariffs, emphasizing that these taxes could severely impact them, given that the US is India's largest trading partner.

In response to pressure from the US, India reduced import duties on bourbon whiskey from 150% to 100% and made cuts on several varieties of wine, including those made from fresh grapes.

Additionally, customs duty reductions announced in the Budget on products like motorcycles and synthetic flavorings are expected to benefit American exports.

India has also recently canceled an equalization levy on large technology firms such as Google.

As part of fostering stronger economic ties, Indian companies like Jio Platforms Ltd and Bharti Airtel have partnered with SpaceX to offer broadband internet services through Starlink.

The US is urging India to pursue a comprehensive bilateral trade agreement while looking to open its agricultural sector to American enterprises. However, experts believe that India may be reluctant to include agriculture in these discussions due to its politically sensitive nature.

Notably, US agricultural exports to India reached $1.6 billion in 2024, with key items including almonds and apples.

In June 2023, India lifted retaliatory import duties on eight US products, which were imposed in 2019 in response to US tariff increases on steel and aluminum.

During 2024, India's exports to the US included pharmaceuticals valued at $8.1 billion, alongside other major sectors.

For imports, India brought in $4.5 billion worth of crude oil and other petroleum products among various other items.

In 2023-24, the US emerged as India's largest trading partner with a bilateral trade of $119.71 billion, consisting of $77.51 billion in exports and $42.19 billion in imports, resulting in a trade surplus of $35.31 billion.

Since April 2000, India has secured $67.8 billion in foreign direct investments from the US, which highlights the importance of this relationship.

India, US, Trade