India and the US are making significant strides towards a comprehensive trade agreement, aiming to double their bilateral trade to $500 billion by 2030. This progress follows recent discussions between Prime Minister Narendra Modi and US Vice President JD Vance during his visit to New Delhi.
What’s on the Table?
The two leaders have finalised a roadmap to guide negotiations on a Bilateral Trade Agreement (BTA). This framework addresses key issues such as tariff reductions, market access, and cooperation in sectors like energy, defence, and strategic technologies. The goal is to create a balanced and mutually beneficial trade relationship that promotes job creation and economic growth in both countries.
Tariffs and Market Access
The US had imposed a 26% tariff on Indian imports earlier this month, but President Donald Trump has since announced a 90-day pause on these tariffs to facilitate negotiations. In return, India is considering reducing tariffs on certain US goods and increasing imports of American energy and defence equipment. Discussions also include providing greater market access to US e-commerce giants like Amazon and Walmart, which currently face restrictions in India.
Broader Cooperation
Beyond trade, Modi and Vance discussed enhancing cooperation in areas such as energy, defence, and strategic technologies. They also exchanged views on regional and global issues, emphasising the importance of dialogue and diplomacy. The US sees India as a key partner in countering China’s influence in the Indo-Pacific region, and both countries are working to strengthen their strategic partnership.
Looking Ahead
With the roadmap in place, both nations are optimistic about concluding the first phase of the trade agreement by the end of 2025. This would be a significant step towards achieving the ambitious $500 billion trade target by 2030. As negotiations continue, the focus will remain on creating a fair and balanced trade relationship that benefits workers, farmers, and entrepreneurs in both countries.
