India and US Near First Tranche of Trade Deal to Address Reciprocal Tariffs and Oil
India and the US are close to finalizing the first tranche of a bilateral trade agreement focused on resolving reciprocal tariffs, including a 50% tariff imposed by the US on Indian goods due to India's energy trade with Russia. Six rounds of talks have been held, with negotiations nearing completion. The agreement also aims to improve market access and boost bilateral trade volumes substantially by 2030.
India and the United States began negotiations for a bilateral trade agreement (BTA) in March 2025, predating US President Donald Trump's imposition of reciprocal tariffs on key economies, including India. India faced a 25% tariff initially, later increased to 50%, as a penalty linked to its purchase of Russian crude oil. After six rounds of negotiations, concluded with meetings in October 2025, both sides are near agreement on the first tranche of the deal, expected to address these reciprocal tariffs and related market access issues. India awaits a response from the US on its latest trade proposals, with no further negotiation rounds planned soon. Despite tariffs, India’s merchandise exports to the US grew by over 10% from April to October 2025, highlighting robust trade ties. The pact aims to balance trade between the nations and expand bilateral commerce from the current $191 billion to $500 billion by 2030. The US continues to seek better access for certain agricultural and genetically modified products in the Indian market, while India focuses on tariff relief to protect export sectors like textiles, chemicals, pharmaceuticals, and engineering goods. The removal of additional duties on about $1 billion worth of Indian processed foods since November 2025 marks progress amid ongoing negotiations. The deal’s finalization will hinge on resolving tariff and market access disputes to provide substantial value for both countries.
