India, US Discuss Trade Pact Acceleration

New Delhi, May 20 (PTI) Commerce and Industry Minister Piyush Goyal on Tuesday held discussions with US Commerce Secretary Howard Lutnick in Washington to expedite negotiations on the first phase of the proposed bilateral trade agreement between the two countries.

Goyal is in Washington for a ministerial-level meeting to review the progress of negotiations of the trade pact.

"Good discussions with Secretary @HowardLutnick towards expediting the first tranche of India-US Bilateral Trade Agreement," Goyal said in a post on X.

Goyal was in Washington in March also for the trade talks.

The minister-level meeting is followed by the deliberations between chief negotiators of the two countries, which will continue until May 22.

The meetings come against the backdrop of both countries exploring the possibility of an interim trade arrangement in goods to secure "early mutual wins" ahead of finalising the first phase of the trade agreement by fall (September-October) this year.

The main issues that will figure in the negotiations include market access, rules of origin, and non-tariff barriers.

Officials from New Delhi and Washington aim to take advantage of the 90-day tariff pause window to advance the talks. The US has suspended the additional 26 per cent tariffs on India till July 9. It was announced on April 2 to bridge the widening trade deficit.

However, the 10 per cent baseline tariff imposed on the countries will continue to remain in place.

To boost bilateral trade, India is seeking duty concessions for labour-intensive sectors like textiles, gems and jewellery, leather goods, garments, plastics, chemicals, shrimp, oil seeds, chemicals, grapes, and bananas in the proposed pact with America.

On the other hand, the US wants duty concessions in sectors like certain industrial goods, automobiles (electric vehicles in particular), wines, petrochemical products, dairy, agriculture items such as apples, and tree nuts.

The terms of reference (ToRs) for the BTA have been finalised by India and the US, which include around 19 chapters covering issues like tariffs, goods, services, rules of origin, non-tariff barriers, and customs facilitation.

The US has on multiple occasions raised concerns over certain non-tariff barriers being faced by American goods in the Indian markets.

The US remained India's largest trading partner for the fourth consecutive year in 2024-25, with bilateral trade valued at USD 131.84 billion. The US accounts for about 18 per cent of India's total goods exports, 6.22 per cent in imports, and 10.73 per cent in the country's total merchandise trade.

With America, India had a trade surplus (the difference between imports and exports) of USD 41.18 billion in goods in 2024-25. It was USD 35.32 billion in 2023-24, USD 27.7 billion in 2022-23, USD 32.85 billion in 2021-22 and USD 22.73 billion in 2020-21. The US has raised concerns over this widening trade deficit.