The first tranche of a bilateral India-US trade deal is “nearing closure” following months of negotiations. Commerce Secretary Rajesh Agarwal revealed on Monday that the agreement would address the 25% reciprocal tariff imposed by US President Donald Trump in April. The BTA will have two components including an initial package to address the levies.
“We are engaged with the US on the BTA. It has two parts. One part of negotiations will take time. The other part is a package which can address reciprocal tariffs. We are working on both aspects. The package that can address reciprocal tariffs is more or less near closure and we should get it soon,” the official said.
Trump tariffs to be withdrawn?
The BTA was formally proposed in February this year and seeks to more than double bilateral trade — from the current $191 billion to $500 billion by 2030. Talks were first announced during Prime Minister Narendra Modi’s visit to Washington earlier this year. Negotiations have continued despite tariff escalations by the United States in the ensuing months. Trump had announced a 25% tariff on Indian goods starting August 1, followed by another 25% increase days later, citing India’s continued purchase of Russian oil.
Agarwal explained on Monday that the soon-to-be-concluded agreement is expected to address the 25% penalty imposed against India. The official added that the BTA has multiple packages or tranche and this will be the first tranche to address the tariffs. Details remain scarce at present with Agarwal merely indicating that the deal would be announced on a mutually agreed date by both countries.
What is in focus for India-US ties?
Government officials had assured last week that the pact would be “highly detailed and fully aligned with WTO norms” — with negotiations focused on key sectors.
Agrawal also confirmed on Monday that two countries were also moving ahead with a long-considered LPG supply arrangement. He clarified that the prospective LPG purchase is not linked to the trade negotiations but is intended to help maintain the overall trade balance between the two countries.
Over the past few months, both sides have explored an interim trade arrangement; however, India has expressed reservations over US proposals seeking greater access to India’s agricultural and dairy sectors. These sectors remain sensitive for India, given their critical role in employment and livelihoods for millions.