India and US Finalise Terms of Reference to Address Trade Tariff Barriers

India and the United States have taken a major step forward in strengthening their trade ties. The two nations have finalised the Terms of Reference (ToR) to launch the first phase of a bilateral trade agreement (BTA), focusing on reducing tariff and non-tariff barriers. This move marks a fresh chapter in their growing economic partnership.

Aiming for $500 Billion in Trade by 2030

The agreement comes with an ambitious vision—to take bilateral trade to $500 billion by 2030. With trade secretary confirming India’s decision to follow a path of trade liberalisation with the US, the foundations for deeper cooperation are now in place. This liberal approach aims to ease restrictions, open markets, and boost smoother trade flows between the two countries.

Talks Kick Off Virtually, In-Person Meetings in May

Initial discussions will begin virtually this month, followed by an in-person meeting in the second half of May 2025. According to the additional secretary in the trade ministry, these talks are set to lay the groundwork for a phased trade agreement that both countries hope to finalise by the end of 2025.

Focus on Tariff and Non-Tariff Barriers

A key focus of the upcoming discussions is the removal of both tariff and non-tariff barriers that currently hinder trade. India sees this as an opportunity to unlock smoother market access and simplify regulatory processes. By easing these restrictions, businesses in both nations can benefit from greater flexibility and fewer trade obstacles.

Reciprocal Tariffs Under Review

While the US had earlier announced reciprocal tariffs to take effect from April 2, these have now been put on hold. The Indian Commerce Ministry has stated that it will assess any potential impact of these tariffs on India’s trade performance, especially since goods typically take 40–45 days to reach the US.

Conclusion

This trade dialogue signals a strong commitment from both sides to deepen economic engagement. If successful, the India-US bilateral trade agreement could open new growth opportunities and set the stage for a robust, long-term partnership.

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