First step in India-US trade deal may unlock $48.2B in exports

The first tranche of the India–US trade deal, aimed at reducing reciprocal tariffs on Indian exports, is close to being finalised, though no timeline has been confirmed, Commerce Secretary Rajesh Agrawal said on Thursday. The India-US trade deal may unlock $48.2B in exports

Agrawal noted that Indian and US negotiating teams remain in continuous discussions following a virtual meeting between Commerce Minister Piyush Goyal and the US Trade Representative (USTR) in late December. “Negotiating teams are talking continuously to reach consensus. It is very near, but we cannot put a date,” he said.

The United States currently imposes reciprocal tariffs of up to 50 percent on most Indian goods, among the highest in the world. Agrawal emphasised that both sides are committed to securing a deal and dismissed speculation about potential failure in talks.

A delegation led by Deputy USTR Rick Switzer visited New Delhi from December 9-11, discussing both the framework for the deal and broader Bilateral Trade Agreement (BTA) negotiations. India and the US have now held six rounds of talks covering the broader BTA and an interim arrangement to lower tariffs.

The push for a trade deal stems from the “Mission 500” target set by Prime Minister Narendra Modi and former US President Donald Trump in February, aiming to double bilateral trade to $500 billion by 2030. The first tranche of a multi-sector BTA was initially targeted for fall 2025, but the deadline was missed. India’s Chief Economic Adviser has indicated an interim pact could be in place by March 2026.

The deal is particularly important as Indian exports worth $48.2 billion currently face elevated US tariffs. Electronics shipments, which remain tariff-free, have driven export growth, helping total shipments rise 9.8 percent year-on-year to $65.9 billion during April–December FY26, government data shows.