India has reportedly made significant progress in its trade
discussions with the United States, emerging as a front-runner in negotiations
for a new bilateral trade agreement. According to a Reuters report citing a
senior official, both nations have finalised the terms of reference for the
first phase of the trade deal, setting the stage for a potential agreement
within the next 90 days.
The official stated, “We are far ahead in trade talks with
the US compared to other countries… there are lots of possibilities in 90
days.” This suggests that India is currently among the closest trading partners
to reaching a concrete arrangement with the U.S., especially in the wake of
newly imposed tariffs by the Donald Trump administration.
A Win-Win Framework in the Making
Described as having a “win-win shape and form,” the proposed
trade agreement is expected to benefit both countries by addressing key
concerns and easing trade restrictions. The deal is seen as a critical move
amid escalating global trade tensions, especially given recent tariff
announcements targeting Indian exports.
Despite the recent imposition of a 26% tariff on several
Indian goods by the United States, India has refrained from issuing retaliatory
duties. Instead, the Indian government chose to expedite trade talks,
positioning itself as a proactive and constructive partner. President Trump has
temporarily paused tariff enforcement for select nations, including India, in a
bid to foster productive dialogue and possibly lower tariffs through mutual
agreement.
India-U.S. Trade: A Strategic Pillar
The United States continues to be India’s largest trading
partner. In the financial year 2023–24, the two-way trade volume exceeded $118
billion. The ongoing trade discussions aim to significantly expand this
relationship, with the long-term goal of increasing bilateral trade to $500
billion by 2030.
Union Commerce Minister Piyush Goyal had earlier emphasised
that both India and the United States have faced challenges due to China’s
trade practices. Speaking at a trade forum, he said, “Manufacturers in India
and the US have suffered from China's unfair trade practices over the years.”
This shared sentiment has brought the two countries closer in their efforts to
establish a more balanced and fair trade regime.
Monitoring Trade Flows and Preventing Misuse
Meanwhile, Indian customs authorities have been alerted to
closely monitor import and export patterns. Officials are keeping an eye out
for any unusual surges in trade volumes to prevent the country from being used
as a re-routing hub for goods intended to bypass U.S. tariffs on other nations.
“India should not be used as a re-routing destination,” a
senior government source told PTI. This step is aimed at maintaining
transparency and integrity in the country’s trade practices, especially as
sensitive negotiations continue with the U.S.
Trump's Remarks and India's Response
Donald Trump, while announcing the new tariff structure last
week, commented on India’s trade policies. Referring to Prime Minister Narendra
Modi, he said, “He is a great friend of mine, but I said to him that 'you're a
friend of mine, but you've not been treating us right'. India charges us 52 per
cent, so we will charge them half of that — 26 per cent.”
Despite these remarks, Indian authorities have responded
diplomatically and constructively, focusing on reaching an agreement that
benefits both sides without escalating tensions.
Way Forward
With regular virtual meetings and clear timelines now in
place, both India and the United States are working diligently to finalise the
first phase of the agreement. If concluded successfully, this deal could set a
precedent for future collaborations and help counterbalance global supply chain
challenges.
As trade talks progress, stakeholders across industries in
both nations are hopeful for a resolution that strengthens economic ties while
fostering innovation, investment, and employment growth.