Commerce Secretary Calls for Early Tranches in Free Trade Agreements for Faster Outcomes

India Aims to Accelerate FTA Negotiations with a Multi-Sectoral Approach

India’s Commerce Secretary Sunil Barthwal has emphasized the need for faster outcomes in Free Trade Agreement (FTA) negotiations by prioritizing early tranches of trade deals instead of waiting for comprehensive agreements. Speaking at an event on March 19, Barthwal stressed that lengthy negotiations often result in businesses losing interest, and an incremental approach could yield quicker benefits for both parties.

Highlights:

• India seeks to finalize early tranches of FTAs to ensure speedier trade benefits.
• The India-US Bilateral Trade Agreement (BTA) is a priority, with a focus on core trade issues such as tariff and non-tariff barriers.
• India and the US aim to increase bilateral trade to $500 billion by 2030.
• The first tranche of the India-US BTA is expected by fall 2025.
• New Delhi is also negotiating FTAs with the UK, EU, Oman, and New Zealand.

India Seeks Faster Trade Deals to Boost Global Trade Relations

Barthwal underscored the importance of resolving fundamental trade concerns upfront to expedite bilateral agreements. India is particularly focused on addressing tariff and non-tariff barriers, along with regulatory hurdles, to ensure smoother market access for businesses.

“Sometimes FTAs take so long that businesses lose interest. That is why we are reviewing these issues and talking to our FTA partners and internal departments to explore if we can first address the core trade concerns and finalize at least an early tranche of a comprehensive agreement,” Barthwal stated.

The Indian government is keen on adopting a phased approach, beginning with sectors that promise mutual economic benefits before expanding into more complex negotiations.

India-US Trade Deal: First Tranche Expected by Fall 2025

The India-US Bilateral Trade Agreement (BTA) is a top priority for the Indian government, with officials actively working on defining the first tranche of the deal.

• The objective is to increase total bilateral trade between India and the US to $500 billion by 2030.
• A multi-sectoral approach is being adopted, ensuring that different industries benefit from trade liberalization.
• Regular high-level discussions are taking place between Indian and US trade officials to finalize the scope of the agreement.

A government official, speaking on March 17, confirmed that the BTA is still in the early stages, stating:

“India and the US are regularly speaking on the BTA. It is a multi-sectoral trade deal, but we haven’t yet finalized the contours. We are still deciding what will be covered and what won’t be.”

US Seeks Tariff Reductions on Key Exports; India Weighing Concessions

As part of the proposed trade deal, the US is pushing for India to eliminate import duties on American cars. Meanwhile, India is considering reducing tariffs on certain US imports, including:

• Apples
• Walnuts
• Cranberries

While these negotiations are still in progress, the final agreement is expected to balance mutual benefits, ensuring that both economies gain from increased market access.

India Expanding FTA Talks Beyond the US

Apart from the US, India is actively engaged in FTA negotiations with several other key economies, including:

• United Kingdom (UK) – Talks have been ongoing for an India-UK FTA, with significant progress made in resolving market access issues.
• European Union (EU) – Negotiations are underway for a broad trade deal that covers goods, services, and investment protection.
• Oman – India is looking to strengthen its trade and economic relations with Oman, particularly in energy, technology, and industrial sectors.
• New Zealand – Discussions are being held to expand trade partnerships in agricultural and dairy sectors, addressing tariff concerns and market access.

India’s Strategic Shift in FTA Negotiations

The push for early tranches of FTAs aligns with India’s broader trade policy, which aims to:

1. Enhance trade competitiveness by securing faster access to key export markets.
2. Reduce trade imbalances by addressing tariff and non-tariff barriers early in negotiations.
3. Facilitate business growth by ensuring quicker policy certainty and regulatory alignment.

By adopting a phased approach to FTA negotiations, India is ensuring that businesses reap benefits sooner rather than waiting for protracted discussions. This strategic shift is expected to accelerate economic partnerships and drive India’s trade growth in the coming years.