India and US Initiate Talks for Proposed Bilateral Trade Agreement
India and the US are set to hold sector-specific talks to finalize a bilateral trade agreement, targeting an increase in bilateral trade to USD 500 billion by 2030. The agreement aims to reduce tariffs and promote market access while addressing concerns from Indian exporters regarding US tariffs. Recent discussions followed high-level talks and a visit from US trade officials.
India and the United States have agreed to engage in sector-specific discussions in the upcoming weeks to establish the framework of a proposed bilateral trade agreement (BTA). This decision arose following four days of negotiations among senior officials from both nations, concluding recently in New Delhi. The commerce ministry stated that these expert-level engagements aim to initiate an early round of in-person negotiations soon, promoting mutual economic growth, fairness, and job creation.
The primary objective of the agreement is to enhance market access between both countries, reduce tariff and non-tariff barriers, and strengthen supply chain integration in a manner beneficial to both parties. The commerce ministry noted that both sides are determined to finalize the agreement’s first draft by the fall of 2025.
A team of US officials, led by Assistant US Trade Representative Brendan Lynch, visited India to further define the proposed trade pact, with an intent to significantly boost bilateral trade, targeting USD 500 billion by 2030. This meeting follows Commerce and Industries Minister Piyush Goyal’s recent visit to Washington and subsequent communications between officials.
US President Donald Trump expressed confidence in the trade negotiations, commending Indian Prime Minister Narendra Modi as a “very smart man.” He emphasized the need for tariff discussions, highlighting concerns over high tariffs imposed by India and other nations on American products. In a potential trade agreement, both countries would either reduce or eliminate tariffs on a wide array of goods and services.
The United States has requested duty concessions in specific sectors such as industrial goods, automobiles, and agricultural products, while India is likely to propose reductions for labor-intensive sectors, particularly textiles. Indian industry representatives are advocating for protections against US tariffs, citing the crucial nature of the US as India’s largest trading partner.
Current trade dynamics show a significant US agricultural export volume to India, despite India’s political sensitivity regarding agriculture and dairy sectors in negotiations. In June 2023, India lifted retaliatory duties on several US products, a measure prompted by previous tariff increases by the US on steel and aluminum.
Recent trade statistics indicate robust activity between the two nations, with India exporting pharmaceuticals, telecom instruments, and precious stones valued at over USD 77 billion in 2024. Conversely, India’s imports from the US included substantial volumes of crude oil and other critical goods, establishing the US as India’s largest trading partner and contributing to a trade surplus for India.
Since 2000, India has attracted significant foreign direct investments from the United States, amounting to approximately USD 67.8 billion, evidencing the deep economic ties between the two countries.
In conclusion, India and the United States are actively engaging in discussions to structure a bilateral trade agreement aimed at enhancing their trade relationship significantly. The upcoming negotiations focus on reducing trade barriers and increasing market access, with a target to finalize initial terms by 2025. The economic partnership continues to deepen, with both nations recognizing the mutual benefits of a comprehensive trade framework.
Original Source: www.ndtv.com
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