India-US trade deal likely this year, says Commerce Secretary

India is expecting to sign the first tranche of the Bilateral Trade Agreement with the US by the end of this year, Commerce Secretary Rajesh Agarwal said on Friday (November 28). However, he cautioned that in trade negotiations, there cannot be any rigid final deadlines, as even one sticking point from any side might delay the entire process.

"I think our expectations, we are very optimistic and very hopeful that we should find a solution within this calendar year,” said Agarwal a tthe FICCI Annual General Meeting.

"With any trade negotiations, the final deadlines cannot be because even if there is one sticking point or one sticking issue which is in the mind of even one of the partners, the trade deal may not meet that deadline,” he added as quoted by ANI.

US trade policy and Trump’s tariffs

Although India and the US initially aimed at completing the first tranche of an India-US bilateral trade agreement by the fall of 2025, changes in the US trade policy landscape, including tariffs imposed on India by President Donald Trump, altered the plans.

"We have found a lot of changes in the global trade landscape. One of the key issues has been in the US landscape, where it came out with reciprocal tariffs, which were imposed on all the trading partners,” said the Commerce Secretary.

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He further stated that because of this, India and the US are now engaged in two parallel negotiations, including a broader Bilateral Trade Agreement and a more immediate Framework Trade Deal aimed at addressing high tariffs imposed on India.

‘We are close, but won’t hurry’

As for the current status of the Indo-US trade talks, Agarwal said, “We are close; we have tried to iron out most of the issues. Now it is only a matter of time before this decision has to be taken, that when the two countries have to find the right landing zone to announce it."

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"I think we need to find a pathway for the complete elimination of reciprocal tariffs in our process of doing (full) BTA. So I think that will take a bit of time, and we'll not hurry up those we are working on various aspects of BTA," he added.

The backdrop

The Bilateral Trade Agreement, formally introduced in February after instructions from both governments, aims to boost bilateral trade from $191 billion to $500 billion by 2030. The plan was first revealed during Prime Minister Narendra Modi’s visit to Washington earlier in the year.

Also Read: India, US to push ahead on trade deal despite tariff tensions

Despite recent US tariff hikes, discussions have continued. President Donald Trump raised duties on Indian products by 25 per cent from August 1 and added another 25 per cent increase soon after, pointing to India’s ongoing imports of Russian oil. The United States had already placed similar reciprocal tariffs on countries with which it runs trade deficits.