New Delhi/Jaipur: India and the United States commenced the first day of a two-day round of talks on Wednesday to advance negotiations on a proposed bilateral trade agreement aimed at strengthening economic ties between the two nations. The discussions, hosted in New Delhi, focus on finalizing a mutually beneficial framework that addresses key trade concerns, including high tariffs and market access issues, while fostering a strategic economic partnership.

On the first day of discussions, Commerce Secretary Rajesh Agrawal met with US Deputy Trade Representative Rick Switzer. The talks provided a platform for both sides to exchange views on ongoing trade negotiations and broader economic cooperation. According to the Department of Commerce, “The two sides exchanged views on matters related to India-US trade and economic ties, including on the ongoing negotiations for a mutually beneficial Bilateral Trade Agreement (BTA).”

The deliberations are scheduled to continue through Thursday, December 11, with both sides aiming to address outstanding issues and finalize the contours of the trade pact. The discussions carry significant weight, as Indian industry and exporters have been directly impacted by steep tariffs imposed by the US on Indian goods.

High Tariffs and the Need for Resolution

The US tariffs, introduced under the Donald Trump administration, have posed a considerable challenge for Indian exporters. Initially, a 25 per cent duty was levied on Indian goods, citing the trade deficit between the two nations, which was reported at approximately USD 46 billion for 2024-25. Subsequently, an additional 25 per cent tariff was imposed as a penalty related to India’s purchase of Russian crude oil, bringing the effective duty to 50 per cent on certain goods.

These high tariffs have had a tangible impact on Indian shipments to the US, prompting businesses to explore alternative markets to maintain profitability. Despite this diversification, the US remains a key export destination, accounting for about 18 per cent of India’s total exports. The resolution of these tariff issues is considered critical for firming up the first phase of the proposed trade agreement and ensuring long-term stability in bilateral trade.

Negotiation Dynamics

During the talks, the US delegation has emphasized the need for duty concessions on agricultural and industrial products, reflecting longstanding concerns regarding market access and trade balance. India, however, has strongly resisted any concessions on the agricultural and dairy sectors, maintaining that domestic priorities and food security concerns must guide its trade policy.

Commerce and Industry Minister Piyush Goyal, speaking at the sidelines of the Pravasi Rajasthani Divas in Jaipur, confirmed that discussions with the US are progressing steadily. “Talks are continuously progressing with them. We are moving forward towards a bilateral trade agreement,” he stated, signaling cautious optimism while noting that complex issues remain to be resolved.

The US delegation includes Assistant US Trade Representative for South and Central Asia Brendan Lynch, who is serving as the chief negotiator for the pact, while India is represented by Darpan Jain, Joint Secretary in the Department of Commerce. This marks the US officials’ second visit since the imposition of high tariffs, following their previous trip on September 16.

Parallel Negotiations and Strategic Goals

India and the US are pursuing two parallel tracks of negotiations. The first involves a framework trade deal designed to specifically address tariff-related challenges faced by Indian exporters. The second track entails broader discussions on a comprehensive trade agreement aimed at deepening bilateral economic engagement. Both tracks are essential for achieving the overarching goal of enhancing trade, reducing market barriers, and creating a long-term strategic partnership.

In February 2025, leaders of the two countries directed officials to negotiate a trade agreement, with the initial phase of the pact originally targeted for completion by fall 2025. To date, six rounds of negotiations have been held, reflecting the complexity and high stakes involved in reconciling the interests of both nations.

The proposed agreement is ambitious in scope. Its stated objective is to more than double bilateral trade from the current USD 191 billion to USD 500 billion by 2030. Achieving this goal would require significant cooperation across sectors, addressing tariff and non-tariff barriers, enhancing regulatory alignment, and promoting investment and innovation-led trade opportunities.

Trade Statistics and Economic Significance

The US has remained India’s largest trading partner for four consecutive years, with bilateral trade valued at USD 131.84 billion in 2024-25, comprising USD 86.5 billion in Indian exports. The US accounts for approximately 18 per cent of India’s total goods exports, 6.22 per cent of its imports, and 10.73 per cent of total merchandise trade.

However, recent trade data indicates challenges for Indian exporters. Merchandise exports to the US declined for the second consecutive month in October 2025, falling by 8.58 per cent to USD 6.3 billion. This decline underscores the economic impact of high tariffs and the urgency of concluding negotiations to stabilize trade flows.

Industrial and Exporter Concerns

Indian exporters have expressed concerns over the cumulative effect of the 50 per cent tariffs, which significantly increase the cost of Indian goods in the US market. While alternative markets such as the European Union, Southeast Asia, and Africa offer opportunities, the US remains a vital destination due to its size, purchasing power, and strategic significance. The resolution of tariff-related issues is expected to provide immediate relief to exporters, reduce uncertainty, and strengthen confidence in India’s global trade strategy.

For the US, securing greater access for agricultural and industrial products is a key priority, reflecting broader domestic economic interests. Balancing these demands with India’s domestic priorities, including protecting farmers and supporting emerging industries, is central to the ongoing negotiation strategy.

Looking Ahead

As the two-day talks proceed, both sides are expected to engage in detailed discussions on specific product categories, tariff schedules, and mechanisms to ensure compliance with the trade pact. Officials are also likely to explore dispute resolution mechanisms, intellectual property protections, and investment facilitation measures to support broader bilateral engagement.

Commerce Secretary Rajesh Agrawal has previously highlighted that while a comprehensive agreement will take time, the framework deal is crucial to addressing immediate concerns arising from tariffs and ensuring smoother trade flows. Both India and the US have reiterated their commitment to maintaining constructive dialogue and resolving differences through negotiation.

Conclusion

The India-US bilateral trade negotiations represent a critical juncture in the economic relationship between the two nations. With high tariffs affecting key export sectors, the talks carry significant importance for Indian industry, exporters, and policymakers. The discussions also reflect broader strategic objectives, including enhancing economic cooperation, promoting trade diversification, and strengthening bilateral ties in line with global market dynamics.

As the second day of talks unfolds on Thursday, attention will remain focused on the ability of both sides to bridge differences, reconcile domestic priorities, and move closer to a framework that ensures long-term stability, fairness, and mutual benefit. The outcome of these negotiations will not only influence immediate trade flows but also shape the trajectory of India-US economic relations in the coming decade, reinforcing the significance of diplomacy, negotiation, and strategic economic planning in global commerce.

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