India, US Aim to Finalise Trade Deal by Year-End Including Tariff Resolutions

India and the United States are progressing with discussions on a bilateral trade deal, with expectations of its conclusion by the end of 2025. The focus remains on resolving reciprocal tariffs and securing sector-specific concessions amid a shifting global trade environment. 

India and US Nearing Agreement on Trade Deal 

Commerce Secretary Rajesh Agarwal stated that India and the US are holding regular virtual trade discussions. The aim is to finalise the Bilateral Trade Agreement (BTA) before December 31, 2025, as most contentious issues have already been addressed. Talks cover 2 major frameworks: the trade deal itself and a parallel arrangement on reciprocal tariffs. 

India is negotiating to secure tariff concessions on labour-intensive exports such as textiles, leather goods, gems, chemicals, plastics and agricultural items like bananas and grapes. In return, the US is requesting tariff relief on industrial goods, dairy, automobiles—especially EVs—wines, petrochemicals, and GM agricultural produce. 

Reciprocal Tariffs Imposed During Previous US Presidency 

India is also addressing the 25% reciprocal tariffs first imposed by the US under former President Donald Trump. These include duties on both industrial imports and oil, which have impacted trade flow. By resolving these tariffs in a separate pact, the nation aims to normalise trade dynamics and reduce friction in future bilateral exchanges. 

Read More: India Looks Beyond the US for Seafood Exports Amid Tariff Hike, Shrimp Exports Rise 18%! 

Current Trade Data and Tariff Challenges 

Commerce Secretary Agarwal noted that India’s exports to the US have increased by $10 billion compared to the previous year. However, Washington’s 50% duties affecting $48.2 billion-worth of Indian exports remain a concern. Roughly half of these tariffs are linked to India’s Russian energy purchases, leading to penalties beyond typical MFN status norms. 

Conclusion 

As India and the US continue their virtual meetings, the chances of finalising the BTA and resolving tariff issues by year-end appear promising. With most obstacles overcome, the remaining matters may require high-level political intervention for timely closure. 

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