India and the US are gearing up to negotiate a historic Bilateral Trade Agreement (BTA) that could significantly enhance trade relations between the two nations. The move comes amid US President Donald Trump’s plans to impose reciprocal tariffs on trading partners, including India.
At a recent weekly briefing, Ministry of External Affairs (MEA) spokesperson Randhir Jaiswal stated that the agreement seeks to expand two-way trade in goods and services, increase market access, and reduce tariff and non-tariff barriers.
“The two governments are advancing discussions on a multi-sector Bilateral Trade Agreement. Our objective is to strengthen and deepen India-US trade relations, improve market access, reduce trade barriers, and integrate supply chains between the two countries,” said Jaiswal.
Key Developments in BTA Negotiations
The announcement follows Prime Minister Narendra Modi’s visit to the US in February 2025, where both sides expressed interest in negotiating a mutually beneficial BTA. Additionally, Commerce and Industries Minister Piyush Goyal recently met with his US counterparts to accelerate discussions on the agreement.
“During PM Modi’s visit to the US, both countries announced plans to negotiate a multi-sector Bilateral Trade Agreement. The Commerce and Industries Minister was in the US to advance discussions,” Jaiswal added.
Impact on Trade and Supply Chain Integration
A major highlight of the BTA is supply chain integration between India and the US. The agreement is expected to:
- Reduce trade barriers and enhance market access
- Boost exports and imports between both nations
- Strengthen supply chain networks across key industries
- Facilitate smoother investment flows
While India currently has trade agreements with over 50 countries, including the Asia Pacific Trade Agreement and the South Asia Free Trade Agreement, a BTA with the US could bring substantial economic benefits.
US Tariff Concerns and India’s Position
As negotiations advance, India will likely push for greater market access, while the US may seek increased agricultural exports to India. The outcome of these discussions could redefine India-US trade relations for years to come.
President Donald Trump previously criticized India’s high import duties, particularly on automobiles, stating:
“India charges us auto tariffs higher than 100%. Other countries have used tariffs against us for decades, and now it’s our turn to impose them.”
Trump also highlighted the European Union, China, Brazil, and Mexico as nations imposing high tariffs on the US. He announced that reciprocal taxes would take effect from April 2, ensuring that countries imposing high tariffs on the US would face similar trade restrictions.
Looking Ahead
The India-US BTA negotiations hold immense potential for both nations. If successfully implemented, the agreement could:
- Increase bilateral trade volumes
- Promote economic growth and job creation
- Facilitate smoother investment partnerships
- Strengthen diplomatic and trade ties
As talks continue, global markets and policymakers will closely watch the developments, which could set a new precedent for India-US trade relations.
