Focus on Tariff Reductions in Bilateral Trade Agreement (BTA) Negotiations
The proposed Bilateral Trade Agreement (BTA) between India and the United States is set to be the central focus of negotiations when an Indian delegation visits the US from April 23. According to sources familiar with the discussions, a significant portion of this stage of negotiations will center around mutually lowering tariffs on key goods where both nations have identified room for flexibility. As the first tranche of talks begins, the focus is expected to remain on goods where both countries see potential for tariff reductions. The negotiations are expected to cover 19 key chapters, with both India and the US aiming to make progress on tariff adjustments while considering various economic and political factors.
Highlights:
India-US trade talks to focus on mutual tariff reductions on key goods.
The negotiations are expected to begin with 19 chapters, covering goods, tariffs, and related issues.
The primary objective is to identify areas where both countries can lower tariffs to enhance trade.
The first tranche of negotiations is likely to set the tone for future trade deals.
Team Led by Rajesh Agrawal for In-Person Talks
The Indian delegation is being led by Rajesh Agrawal, the Additional Secretary at the Department of Commerce. Agrawal, who is set to take over as the Commerce Secretary in October, will spearhead the in-person negotiations between the two countries. The team’s visit to the US is scheduled for a three-day period, concluding on April 25. Agrawal’s leadership in these discussions is considered crucial as both nations work toward finalizing the first phase of the BTA. The initial round of talks will primarily address tariff issues, laying the groundwork for further discussions on non-tariff barriers and other trade-related matters in the future.
Highlights:
Rajesh Agrawal, Additional Secretary of Commerce, will lead India’s delegation to the US.
Agrawal is set to become India’s Commerce Secretary in October 2025.
The in-person negotiations will span three days, from April 23 to April 25.
The outcome of these talks will shape the future direction of the BTA.
India’s Tariff Reduction Proposals on Farm Goods and Auto Parts
India has identified key sectors where tariff reductions could benefit both countries, with agriculture and automobile parts being at the forefront of discussions. India has expressed a willingness to reduce tariffs on certain American farm products such as almonds and pistachios, which are popular in the Indian market. In return, India is seeking reciprocal tariff cuts on exports such as automobile parts and essential medicines, both of which are critical to India’s economic interests. These goods have significant trade potential, and the Indian government is hopeful that tariff reductions in these areas will help foster greater bilateral trade. The negotiations are expected to focus on these mutual benefits, especially in sectors where both nations have overlapping interests.
Highlights:
India is seeking tariff reductions on American farm goods like almonds and pistachios.
In return, India is pushing for lower duties on automobile parts and essential medicines.
Trade in these sectors could benefit from tariff cuts, enhancing bilateral commerce.
Agriculture and pharmaceuticals are expected to be key sectors of focus during negotiations.
Potential for Future Discussions on Non-Tariff Barriers
While the current phase of talks is focused on tariffs, non-tariff barriers are also expected to be addressed in later stages of the BTA negotiations. The US has raised concerns over issues like the localization of digital content and the certification of telecom equipment outside of labs. These non-tariff barriers are seen as impediments to smoother trade between the two countries. However, discussions on these matters are expected to be deferred for now and taken up once both countries have made significant progress on tariff reductions. As these technical and regulatory issues remain on the table, the BTA negotiations are likely to evolve to include a broader range of trade-related concerns as talks progress.
Highlights:
Non-tariff barriers, including digital content localization and telecom equipment certification, may be discussed later.
These barriers are seen as obstacles to more seamless trade between India and the US.
Initial talks will prioritize tariff reductions before shifting focus to regulatory challenges.
The inclusion of non-tariff issues will shape future phases of the negotiations.
Bilateral Trade Agreement’s Goal: $500 Billion by 2030
The BTA is a critical component of the broader Mission 500 initiative, which aims to more than double bilateral trade between India and the US to $500 billion by 2030. This ambitious target reflects both countries’ growing recognition of the need to strengthen their economic relationship. As part of this broader goal, the first tranche of negotiations is expected to cover 19 chapters, including tariffs, customs facilitation, and non-tariff barriers. By reaching agreements on these key issues, India and the US hope to pave the way for an expanded and more diversified trade relationship in the coming years. Finance Minister Nirmala Sitharaman has emphasized that India is actively engaging with the US to finalize the first phase of the agreement by fall 2025, with hopes for a significant breakthrough within the year.
Highlights:
Mission 500 aims to double India-US bilateral trade to $500 billion by 2030.
The BTA’s first phase will address key issues such as tariffs and customs facilitation.
Successful negotiations are critical to achieving the broader trade goal of $500 billion by 2030.
India and the US aim to conclude the first phase of the agreement by Fall 2025.
India’s Position as a Major Exporter to the US
India ranks tenth among the top nations that export to the US, with a total export value of $91 billion in 2024. The US remains India’s largest export destination, reflecting the strength of India’s trade relationship with the country. Additionally, the US is India’s fourth-largest source of imports, with goods worth $45.33 billion flowing into India in 2024. This robust trade dynamic underscores the importance of the BTA negotiations, as both nations aim to enhance their economic ties through tariff reductions and broader trade facilitation measures. By addressing tariff and non-tariff barriers, the BTA is seen as an important step toward achieving even greater trade volumes between the two countries in the years to come.
Highlights:
India ranks 10th among countries exporting to the US, with $91 billion in exports in 2024.
The US is India’s largest export destination and fourth-largest source of imports.
Enhanced trade relations between India and the US are a key focus of the BTA negotiations.
Tariff reductions could strengthen economic ties and increase bilateral trade in the future.
