India and the US are enhancing trade ties by focusing on reducing tariffs and improving market access, aiming for a Bilateral Trade Agreement by fall 2025. The initiative follows a significant visit by Indian officials to the US, discussing the mutual reduction of tariffs. Both nations target increasing bilateral trade to $500 billion by 2030, addressing disparities in tariffs and pursuing fair trade relations.
India and the US are actively working to eliminate trade barriers, with a focus on enhancing market access, reducing tariffs, and improving supply chain integration. Minister of State for Commerce, Jitin Prasada, made these remarks following a week-long US visit by an Indian ministerial delegation, as both nations aim to finalize a Bilateral Trade Agreement (BTA) by the fall of 2025.
Prasada noted that the US has not currently imposed reciprocal tariffs on Indian exports, which follows recent discussions where officials considered lowering high tariffs on specific products like automobiles. This potential reduction could positively impact labor-intensive sectors in India, notably engineering goods, textiles, and marine products, as indicated by previous export statistics for FY 2023-24.
Prime Minister Narendra Modi and President Donald Trump have initiated negotiations for a “mutually beneficial, multi-sector” BTA, targeting a significant increase in bilateral trade to $500 billion by 2030 as part of “Mission 500”. This goal highlights the commitment of both countries to enhance trade relations significantly.
Prasada addressed a memorandum issued by the US on February 13, 2025, which directs the US Secretary of Commerce to evaluate the effects of non-reciprocal trade agreements on US trade. The results of this review will inform actions against relevant trading partners, emphasizing the US’s focus on fairness in trade relationships.
The average tariff on US agricultural goods stands at 5%, contrasting sharply with India’s 39% rate. Additionally, India applies a 100% tariff on US motorcycles, while the US applies a minimal 2.4% tariff on Indian motorcycles. Indian officials have expressed the desire for a balanced trade partnership with the US, focusing on resolving both tariff and non-tariff challenges.
In 2023, India-US trade in goods and services surpassed $190 billion, consisting of $123.89 billion in merchandise trade and $66.19 billion in services trade. India exported $83.77 billion in goods to the US, while imports were valued at $40.12 billion, resulting in a trade deficit of $43.65 billion for the US.
The collaborative efforts between India and the US aim to significantly enhance bilateral trade through the removal of trade barriers and the establishment of a fair framework for reciprocal trade. As ongoing negotiations progress towards completing a Bilateral Trade Agreement by 2025, stakeholders anticipate notable benefits across several sectors in both nations, ultimately striving for increased trade volumes by the target year of 2030.
Original Source: www.hindustantimes.com
