As India and the United States continue discussions on a Bilateral Trade Agreement (BTA), Indian officials have made it clear: a ‘zero-for-zero’ tariff deal is off the table. According to sources, such an arrangement is generally reserved for trade between developed economies, and India does not see it as viable in its current economic context.
Zero-tariff deal not on India’s agenda
The idea of eliminating all tariffs between India and the US—something Washington may be hoping for—is unlikely to materialize, officials close to the matter confirmed. They emphasized that India is not prepared to extend zero-tariff benefits across the board, especially when the two countries are at very different stages of development.
“Such a deal is only realistic between developed nations, not between economies like India and the US,” an official stated.
Differing priorities in the India-US trade agreement
The ongoing BTA discussions are complex, with both nations pursuing very different objectives. The US is pushing for progress on data localisation norms, access to government procurement, and India’s tightening of quality control regulations. Meanwhile, India is focused on securing a long-awaited totalisation agreement and more flexible work visa rules for Indian professionals.
Despite these differences, negotiations are moving forward, and both sides are aiming to finalize the first phase of the trade deal by September or October this year.
Goal: Doubling bilateral trade by 2030
The larger ambition driving these negotiations is to more than double India-US bilateral trade to $500 billion by 2030. With that goal in mind, Indian officials are optimistic about making meaningful progress through smaller, early-stage agreements.
“Work has already started, and India is ahead of many other countries in negotiating a trade deal with the US,” said an official involved in the discussions.
Trump’s pause on tariffs buys time for India
Adding momentum to the process is US President Donald Trump’s 90-day pause on reciprocal tariffs, which lasts until July 9 and notably excludes China. This move has provided India with a window of opportunity to fast-track negotiations and potentially strike an interim or “early harvest” deal within the next few months.
Looking ahead
While a zero-tariff trade pact between India and the US is unlikely, there is still significant room for cooperation and progress. The focus now shifts to finding common ground in key areas and moving toward a more balanced, mutually beneficial agreement.
