India–US Bilateral Trade Agreement Nearing Closure; First Tranche to Address High Tariffs

The first phase of the proposed India–US Bilateral Trade Agreement (BTA) is “nearing closure” and is expected to address the high tariffs imposed by the United States, according to a government official quoted in news reports on Monday, November 17. The agreement seeks to resolve tariff-related challenges as well as long-standing market access issues.

Tariff Issues Expected to Be Central to the First Tranche

The United States currently imposes a 50% tariff on Indian goods, including a 25% reciprocal tariff and an additional 25% penalty linked to India’s purchase of Russian crude oil. The official said the first tranche of the BTA would specifically address these duties.

He added that the agreement would be meaningful only if the 25% penalty is resolved as part of the initial package. The BTA framework consists of multiple tranches, with the first one focused on tariff correction. The announcement will be made jointly by both countries at a mutually agreed time.

Negotiation Progress and Recent Engagements

India and the US have held six rounds of discussions so far. Both sides had earlier indicated plans to finalise the first tranche of the agreement by fall 2025. A delegation led by Commerce Secretary Rajesh Agrawal visited Washington last month for a three-day round of discussions, which concluded on October 17.

Bilateral Trade Profile and Market Access Demands

The proposed agreement aims to increase bilateral trade to USD 500 billion by 2030, up from the current USD 191 billion.

The US is seeking wider market access for several categories, including:

• Almonds
• Pistachios
• Apples
• Ethanol
• Genetically modified commodities

The US has remained India’s largest trading partner for the fourth consecutive year in 2024–25, with trade valued at USD 131.84 billion, including USD 86.5 billion in exports from India.

Commerce ministry data shows that India’s merchandise exports to the US fell 11.93% in September, while imports increased 11.78%, reflecting the impact of higher tariffs on outbound shipments.

Read More: RBI Offers Moratorium and Extends FX Window.

Conclusion

The first tranche of the India–US BTA is moving toward completion, with tariff-related issues at the forefront of negotiations. As both countries work to finalise the agreement, the focus remains on easing trade barriers and improving market access to support the long-term target of expanding bilateral trade.

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