India and the United States have agreed to move forward with finalizing a part of their bilateral trade agreement by this year, though neither side has indicated any tariff exemptions for India, despite the looming introduction of US tariffs on April 2.
Trade talks between the two countries were held in New Delhi this week, just days before US President Donald Trump’s new trade tariff regime is set to go into effect, which includes import levies against India. India’s protectionist policies and its trade surplus with the US leave it vulnerable to retaliatory tariffs from the Trump administration.
India’s commerce ministry stated on Saturday that both sides had “broadly come to an understanding” on the next steps toward a multi-sector Bilateral Trade Agreement (BTA), with plans to finalize the first portion of the deal by fall 2025. The talks focused on enhancing cooperation in areas such as increasing market access, reducing tariff and non-tariff barriers, and deepening supply chain integration.
However, the statement did not suggest any concrete actions to reduce trade barriers before the new tariffs are enforced on Tuesday. According to India Ratings and Research, the new tariffs could cause a decline of up to $7.3 billion in India’s exports to the United States in the coming fiscal year.
In recent months, India has made moves to ease tensions with the US, including cutting tariffs on certain products like high-end motorcycles and bourbon whiskey. Prior to this week’s trade discussions, there were reports that India might offer to remove a levy on online services like advertising and consider reducing tariffs on cars, electronics, and medical services.
The Indian Express reported that both nations have made “substantial convergence” on the general terms of a trade deal but have not yet finalized the specifics. One key issue affecting the negotiations is the US’s decision to impose a 25% tariff on countries purchasing oil from Venezuela, which could also impact India, a buyer of Venezuelan crude.
Despite his earlier criticism of India’s high tariffs, President Trump suggested that the situation with India would “work out very well,” although no further details were provided.
