India and US ‘very close’ to interim deal to lower reciprocal tariffs : Commerce Secy
NEW DELHI : Commerce Secretary Rajesh Agrawal on December 15 said that government is “very close” to closing the initial framework deal with US to lower reciprocal tariffs.
“We are very close on closing the initial framework deal but I don’t want to put a timeline to it,” Agrawal said during a briefing.
“We have done six rounds of talks with the US where we have discussed both the BTA (Bilateral Trade Agreement) as well as an interim deal to lower reciprocal tariffs,” Agrawal said.
There’s a reasonable expectation that India and the US will reach an interim agreement to reduce steep tariffs on most Indian exports, he said, adding that the Deputy USTR’s visit earlier this month was to take stock of trade relations between the two countries and assess progress on the BTA as well as the framework deal.
A delegation led by Deputy US Trade Representative (USTR) Rick Switzer-led was in New Delhi from December 9-11 during which discussions were held on the framework deal as well as the broader Bilateral Trade Agreement.
“We are positively engaged with the US to see if we can close it (the framework deal) sooner than later,” Agrawal added on December 15.
Earlier this month, US Trade Representative Jamieson Greer said the US has received “best” ever offers from India on the proposed trade agreement.
Speaking at a Senate Appropriations Subcommittee hearing in Washington, Greer said that there is resistance in India to certain row crops and other meat and products. Row crops in the US include corn, soybeans, wheat and cotton.
Talks for a BTA between India and the US first emerged in February, when during a meeting between Prime Minister Narendra Modi and his American counterpart, President Donald Trump, the two leaders set a bold new target for bilateral trade, “Mission 500”, aiming to more than double total trade to $500 billion by 2030.
As part of this new goal, the two sides announced plans to negotiate the first tranche of a mutually beneficial, multi-sector BTA by the fall of 2025. While that deadline has been missed, India’s Chief Economic Adviser recently signalled that there should be an interim pact by at least March 2026.
A trade deal between India and the US is crucial given that Indian exports worth roughly $48.2 billion are facing elevated tariffs.
The US first imposed 25 percent duty on Indian goods stating trade deficit concerns, which stood at around $46 billion in 2024-25. An additional 25 percent penalty was imposed later tied to New Delhi’s Russian crude purchases.
The US remained India’s largest trading partner for the fourth consecutive year in 2024-25, with bilateral trade valued at $131.84 billion ($86.5 billion exports).
The US accounts for about 18 percent of India’s total goods exports, 6.22 percent of its imports, and 10.73 percent of its total merchandise trade.
India’s merchandise trade deficit declined to a five-month low of $24.53 billion in November, driven by a fall in gold, oil and coal imports, while exports to the US picked up.
Merchandise exports to the US rose almost 10 percent on-month to $6.98 billion in November.
Amid allegations by US officials of India “dumping” rice, Agrawal said, “More than 80 percent of our rice exports to the US is Basmati rice, which is higher than the general price of rice, so there is no case of dumping here. So, we already have a 50 percent tariff on rice, so I don’t see additional duties on rice as of now.”