India–US Trade Deal First Phase Nearing Completion; Key Tariff Issues Set for Resolution

The first phase of the long-awaited India–US Bilateral Trade Agreement (BTA) is close to being finalised, with both sides focusing on resolving steep tariffs imposed by the Trump administration, a senior government official said on Monday.

The ongoing negotiations are aimed at addressing the 50% tariff the US has levied on Indian goods, including a 25% reciprocal penalty linked to India’s import of Russian crude oil. The deal’s first tranche is expected to provide relief to Indian exporters while easing market access issues raised by the United States.

Tariff Resolution Is the Priority

According to the official, the BTA contains multiple packages:

• One part involves long-term negotiations
• The second part is a tariff-focused package, which is “more or less near closure”

“The agreement would be pointless unless it addresses the 25% penalty on India,” the official noted, emphasizing that the tariff matter is central to the current phase of the deal.

Both countries are expected to announce the agreement on a mutually decided date once the final details are ironed out.

India’s LPG Deal with US Not Part of BTA

The official also clarified that the recent move by India’s state-run oil firms to sign a one-year LPG import deal with the US for 2026 is not part of the trade agreement negotiations. However, the step supports New Delhi’s broader effort to balance trade with Washington, amid concerns raised by the US over India’s trade surplus.

Strained Relations Over Tariffs

India–US ties have faced tension since the Trump administration imposed punitive tariffs on several Indian products. This included:

• 50% duties on Indian goods entering America
• An additional 25% tariff tied to India’s Russian crude imports

Negotiations aim to restore stability and push towards a long-term target of doubling bilateral trade to $500 billion by 2030, up from the current $191 billion.

Six Rounds of Talks Held So Far

A high-level Indian delegation led by Commerce Secretary Rajesh Agrawal visited Washington last month for the sixth round of negotiations, concluding discussions on October 17. Both nations earlier agreed to finalise the first tranche of the deal by fall 2025.

US Push for Market Access

The United States is seeking expanded access to the Indian market for several products, including:

• Almonds and pistachios
• Apples
• Ethanol
• Genetically modified agricultural goods

Trade Snapshot

The US remains India’s largest trading partner, with bilateral trade touching $131.84 billion in 2024–25. However, India’s merchandise exports to the US dropped nearly 12% in September, mainly due to high American tariffs, while US imports into India rose by almost 12%.

Recently, former President Donald Trump stated that the two countries are “pretty close” to a fair trade deal, adding that he plans to lower tariffs on Indian goods eventually.

The upcoming agreement is expected to strengthen one of India’s most crucial international economic partnerships.