India-US Trade Talks Gain Momentum

Published on 3.27.25

  India and the United States are engaged in trade talks with the aim of negotiating a bilateral trade agreement (BTA) that would reduce tariffs on key exports between the two nations. The Indian government has expressed willingness to cut tariffs on over half of $23 billion worth of US imports, but is unlikely to make broad tariff cuts. The talks are progressing smoothly, with no signs of a deadlock ahead of the April 2 deadline for US reciprocal tariffs. Tariffs on key exports such as pearls, mineral fuels, machinery, and electrical equipment will rise by 6-10% due to reciprocal taxes, which could significantly impact India's trade with the US. These products account for half of its exports to the country. The two nations have a strong "business case" for a BTA, with talks aiming to negotiate the first tranche by fall 2025, following discussions between Prime Minister Narendra Modi and Trump in Washington DC last month. Indian officials are being advised to be more aggressive in their trade policies, citing examples of tariffs cut on motorcycles. External Affairs Minister S Jaishankar described the trade talks as "very active" and "intense", with US President Donald Trump's reciprocal tariff set to kick in on April 2. The move is part of efforts to deepen trade ties between the two nations and reduce barriers such as non-tariff restrictions, which could benefit high-demand Indian exports under a moderate tariff increase as part of the deal.

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