India-US Bilateral Trade Agreement on Fast Track

India appears poised to finalise the opening tranche of the India-US Bilateral Trade Agreement before the year draws to a close, with Commerce Secretary Rajesh Agarwal signaling that negotiations have advanced far more than anticipated. Speaking at FICCI’s Annual General Meeting on Friday, Agarwal said both New Delhi and Washington are “very optimistic and very hopeful” about reaching a concrete outcome within the current calendar year.

Despite the upbeat tone, he cautioned that trade deals often hinge on unexpected last-minute obstacles. “With any trade negotiations, the final deadlines cannot be firm because even if there is one sticking point, the trade deal may not meet that deadline,” he noted, highlighting the unpredictable nature of long-form international agreements.

India-US Bilateral Trade Agreement: A Shifted Roadmap and Two-Track Talks

The India-US Bilateral Trade Agreement had initially been scheduled for completion by autumn 2025. However, the trajectory shifted sharply following Washington’s recent policy overhaul, including the imposition of a new wave of reciprocal tariffs. The US decision to raise duties on nearly all trading partners—India included—has reshaped the contours of the dialogue.

As a result, officials are now working on two parallel fronts:

1. The long-term India-US Bilateral Trade Agreement, designed to unlock deeper economic integration.

2. A near-term Framework Trade Deal, aimed at urgently addressing high tariffs slapped on Indian goods.

Agarwal revealed that the framework negotiations are on the verge of conclusion. “We are close. We have tried to iron out most of the issues. Now it is only a matter of time,” he told industry leaders. Both nations, he added, must find the “right landing zone” that allows for a mutually satisfactory announcement.

Tariffs Cast a Shadow but Talks Push Through

The US had imposed tariffs of up to 50% on Indian imports beginning in late August, even as negotiations continued. President Donald Trump has repeatedly pressed India to reduce tariffs in sensitive sectors such as agriculture and to limit its imports of Russian crude.

Trump recently said discussions with Prime Minister Narendra Modi were “progressing well,” a sentiment that Agarwal echoed at the event. According to him, almost all major issues have been resolved, and any remaining gaps “can be handled at a political level.”

India-US Bilateral Trade Agreement: Aiming High – Trade Target of $500 Billion

The India-US Bilateral Trade Agreement, formally proposed in February and endorsed by leaders of both nations, aims to more than double bilateral trade from $191 billion to $500 billion by 2030. Despite tariff headwinds, negotiators have maintained momentum, even as the US imposed a 25% tariff on Indian products starting August 1, followed by another 25% hike days later—moves Washington linked to India’s continued import of Russian oil.

Deficit Widens, But Concerns Stay Low

India’s trade deficit widened to a record $41.68 billion in October, driven by rising gold imports and declining shipments to the US. Agarwal, however, emphasised that the current deficit remains within manageable limits and “not in a worrying zone.”