India-US Trade Agreement Set to Conclude Soon

Regarding the India-USA Trade Agreement

Previous Involvements:

After gaining independence, India’s protectionist measures and the US’s alliances during the Cold War hindered substantial economic collaboration.

1991 Reforms: India’s economic liberalization represented a pivotal moment, creating opportunities for increased foreign investment and trade.

2005–2015: The US became a crucial trading partner, as bilateral trade increased consistently.

Programs such as the US-India Trade Policy Forum (TPF) were established to address conflicts and strengthen connections.

Current Situation:

Trade Volume: Bilateral commerce hit $191 billion, positioning the US as India’s biggest trading partner.

Tariff Conflicts: In April 2025, the US instituted a 10% standard tariff and suggested a 26% counter tariff on Indian products, pointing to trade disparities.

Ongoing Negotiations: Discussions have escalated, as both parties strive to conclude a temporary trade agreement prior to July 9, 2025. Main focus areas consist of:

Access to markets for agricultural and industrial products, including the introduction of genetically-modified (GM) crops;

Tariff reductions for Indian textiles, pharmaceuticals, and electronics;

E-commerce and customs streamlining.

Main Issues in US-India Trade Relations

Tariff Differences: India has one of the highest average applied tariffs in G20 countries — approximately 17%, in contrast to the US average of 3.3%. India is pursuing complete exemption from these tariffs.

The US seeks improved market access, particularly in areas such as agriculture, dairy, and industrial products.

Agriculture and Dairy Concerns: India is careful regarding the liberalization of its agriculture and dairy industries, emphasizing the necessity to safeguard small farmers and local producers.

These areas are politically delicate and have turned into significant obstacles in trade negotiations.

Steel and Aluminum Tariffs: The US has enacted mutual tariffs reaching 26% on Indian steel and aluminum shipments, citing issues of national security.

India has opposed these actions and is pursuing concessions.

Regulatory and Infrastructure Challenges: U.S. exporters frequently encounter unclear regulations, sensitivity to prices, and infrastructure constraints in India.

The Way Ahead

By the end of 2025, the US and India are still committed to completing a multi-sector bilateral trade agreement (BTA).

By 2030, bilateral trade is expected to have doubled to $500 billion from $191 billion in 2024–2025.

The result of both countries' efforts to reach a comprehensive trade agreement could change global supply chains, increase economic resilience, and establish a standard for just globalization.