The Indo-US trade deal is progressing in accordance with the terms of reference agreed upon by the two countries, commerce ministry officials said. The ministry provided an update on the negotiations, stating that a team of Indian negotiators is in the US for the fifth round of negotiations on the bilateral trade agreement.
Key Highlights
- Fifth negotiation round underway in Washington as India and U.S. advance according to finalized Terms of Reference.
- Indian exports to U.S. surged 22% in Q2 despite 10% reciprocal tariff, reflecting strong trade momentum.
"The first round of negotiations occurred when the US team visited India in the last week of March. We then finalized the terms of the negotiations, which have continued since. India's visit to the United States in April and May resulted in two rounds of discussions. Then in June, the US team returned to India, and we had the fourth round of discussions and negotiations on the bilateral trade agreement", said chief negotiator and commerce secretary-designate Rajesh Agarwal.
Agarwal refused to discuss specifics of the two countries' negotiations. India hopes to reach a limited trade agreement by August 1, 2025, when the extended deadline for implementing reciprocal tariffs expires. The United States has already announced the revised reciprocal tariff rates for two dozen countries. The revised rates range from 25 to 40 percent. The new tariffs for India have not yet been announced.
The commerce ministry released trade data on Tuesday, showing that despite the 10% reciprocal tariff imposed by the US, India's exports to the US increased by a healthy 22% in the April-June quarter, while imports from the country increased by 12%.
Another commerce ministry official explained that, aside from a 10% baseline reciprocal tariff imposed by the US, there is no other tariff in place for countries around the world, with the exception of China, which has a 40% tariff. As a result, he stated that in relative terms, countries exporting to the United States have seen little change.
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Meanwhile, officials from the commerce ministry hope to wrap up negotiations for the ASEAN trade agreement by October. Commerce Secretary-designate Rajesh Agrawal stated that the 10th and 11th rounds of talks between the two sides are expected in August in the national capital and October in Malaysia.
"We are involved in the negotiations. Nine rounds of talks have been completed thus far...The progress so far has been uneven; it is not what we could have hoped for, but the good news is that we are making progress in many areas, particularly customs and trade facilitation," Agrawal added.
India is interested in an upgraded trade agreement with the 10-nation ASEAN bloc, as there is growing industry demand for a review of the FTA, which is thought to be biased against India.
