India and U.S. Work Towards Bilateral Trade Deal to Boost Market Access and Double Trade by 2030

India and U.S. Work Towards Bilateral Trade Deal to Boost Market Access and Double Trade by 2030

Last Updated Jun - 02 - 2025, 04:34 PM | Source : Fela News

India and the U.S. collaborate on a bilateral trade agreement aimed at doubling trade to $500 billion by 2030. Talks continue amid rising tariffs, while India a

India and the United States aim to provide preferential market access to each other’s businesses, with teams from both countries actively working on a proposed bilateral trade agreement, Commerce Minister Piyush Goyal stated. Earlier in February, U.S. President Donald Trump and Indian Prime Minister Narendra Modi announced plans to negotiate the first phase of a multi-sector Bilateral Trade Agreement (BTA) by fall 2025, targeting to more than double bilateral trade to $500 billion by 2030, up from the current $191 billion.

“Both nations are committed to collaborating and are keen on granting preferential access to each other's businesses as we move forward with the trade agreement,” Mr. Goyal told reporters in Paris. He is visiting France for talks with leaders and business representatives to enhance trade and investment ties. Addressing Trump's recent announcement to double tariffs on steel and aluminium to 50%, Goyal emphasized that India and the U.S. will continue bilateral efforts to resolve such issues.

“Let’s wait and see... India and the U.S. share strong ties, and we will work together to address these matters bilaterally,” he added. Trade experts warn that higher import duties by the Trump administration could adversely affect Indian exporters, especially those in value-added steel products and auto components.

On May 30, Trump declared he would raise tariffs on steel and aluminium imports from 25% to 50%, effective June 4. The original 25% steel tariff and 10% aluminium tariff were imposed in 2018, with aluminium tariffs increased to 25% earlier in February 2025.

In 2024-25, India exported $4.56 billion worth of iron, steel, and aluminium products to the U.S., including $587.5 million in iron and steel, $3.1 billion in iron or steel articles, and $860 million in aluminium products.

India has formally notified the World Trade Organization (WTO), reserving the right to retaliate with tariffs on U.S. goods in response to earlier steel tariffs.

A delegation of U.S. officials is visiting India this week to discuss the interim trade agreement. This visit is significant as both countries aim to finalize an interim deal by the end of June, with India seeking full exemption from the 26% reciprocal tariff on domestic goods.

India’s chief negotiator, Rajesh Agrawal, Special Secretary in the Department of Commerce, recently completed a four-day visit to Washington, where he held talks with his U.S. counterpart on the agreement. Mr. Goyal also traveled to Washington to boost trade negotiations. There is a possibility that an interim trade agreement could be reached before the first phase of the BTA.

The U.S. remained India’s largest trading partner for the fourth consecutive year in 2024-25, with bilateral trade valued at $131.84 billion. The U.S. accounts for around 18% of India’s total goods exports, 6.22% of imports, and 10.73% of total merchandise trade.

Regarding India’s free trade agreement with the European Free Trade Association (EFTA), Mr. Goyal clarified that the $100 billion foreign direct investment (FDI) commitment under the pact excludes investments through foreign institutional investors (FIIs) in the stock market.

“This is substantial FDI entering the country, bringing advanced technologies. It’s expected to catalyze nearly $500 billion in investments overall. This will help create an entire ecosystem, including hotels, infrastructure, power, and water, contributing significantly to the economy. It’s a major investment inflow from the EFTA agreement,” he said.

The implementation of the pact is progressing quickly and is expected to be in effect before the year ends. The Trade and Economic Partnership Agreement (TEPA) was signed on March 10, 2024, with EFTA members Iceland, Liechtenstein, Norway, and Switzerland. Under the agreement, India secured a $100 billion investment commitment over 15 years and gained lower or zero duties on various products like Swiss watches, chocolates, and cut and polished diamonds.

When asked if a similar arrangement would be part of the proposed trade pact with the European Union’s 27 member countries, Goyal noted that since these nations are already significant investors in India, the Free Trade Agreement (FTA) with the EU may not include similar investment commitments.

Share :