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Strengthening Economic Ties

New Delhi: India and the United States are set to initiate high-level discussions in Washington starting May 17 to evaluate the progress of their proposed bilateral trade agreement. This meeting aims to provide political direction to the chief negotiators and enhance economic collaboration, according to an official source.

During his four-day visit, Commerce and Industry Minister Piyush Goyal will first engage with US Commerce Secretary Howard Lutnick, followed by discussions with US Trade Representative (USTR) Jamieson Greer.

The official noted, “The minister will conduct discussions at the political level to guide the negotiations. They will review the advancements made in the talks over the last two months.” This marks Goyal's second trip to the US.

Following the ministerial meeting, chief negotiators from both nations will convene from May 19 to May 22.

These discussions occur as both countries consider an interim trade arrangement to achieve 'early mutual wins' before finalizing the first phase of the trade agreement by the fall of this year.

Key topics on the agenda include market access, rules of origin, and non-tariff barriers.

India's proposal to impose retaliatory duties on specific US products under WTO regulations due to American tariffs on steel and aluminum will also be a point of discussion in the BTA negotiations.

Officials from both New Delhi and Washington are looking to leverage a 90-day tariff pause to advance their discussions.

The US has temporarily suspended an additional 26 percent tariff on India until July 9, a move announced on April 2 to address the growing trade deficit.

However, the baseline tariff of 10 percent imposed on various goods will remain unchanged.

To facilitate these talks, India's Chief Negotiator for the BTA, Rajesh Agrawal, and Assistant US Trade Representative for South and Central Asia, Brendan Lynch, recently held three days of discussions in Washington.

In March, Goyal had already conducted bilateral meetings with Greer and Lutnick.

Sectoral-level discussions for the trade pact have already commenced between India and the US.

India is advocating for duty concessions in labor-intensive sectors such as textiles, gems and jewelry, leather goods, garments, plastics, chemicals, shrimp, oilseeds, grapes, and bananas in the proposed agreement.

Conversely, the US is seeking duty concessions in areas like certain industrial goods, automobiles (especially electric vehicles), wines, petrochemical products, dairy, and agricultural items such as apples and tree nuts.

The terms of reference (ToRs) for the BTA have been established, encompassing around 19 chapters that address tariffs, goods, services, rules of origin, non-tariff barriers, and customs facilitation.

The US has repeatedly expressed concerns regarding non-tariff barriers affecting American products in Indian markets.

For the fourth consecutive year, the US has remained India's largest trading partner, with bilateral trade reaching USD 131.84 billion in 2024-25. The US constitutes approximately 18 percent of India's total goods exports, 6.22 percent of imports, and 10.73 percent of the country's overall merchandise trade.

India recorded a trade surplus of USD 41.18 billion with the US in goods for 2024-25, compared to USD 35.32 billion in 2023-24, USD 27.7 billion in 2022-23, USD 32.85 billion in 2021-22, and USD 22.73 billion in 2020-21. The US has raised concerns regarding this expanding trade deficit.

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