Centre consults industry on India-US trade pact, seeks suggestions

The commerce ministry on May 2 held a comprehensive consultation with the domestic industry on the proposed India-US trade agreement and sought suggestions to further deepen bilateral trade ties in a mutually beneficial manner, an official said.

The stakeholder consultation was chaired by Special Secretary in the ministry Rajesh Agrawal. He is also India's chief negotiator for the India-US bilateral trade agreement (BTA).

During the meeting, Department of Commerce briefed the industry representatives on recent developments related to India-US trade ties and solicited their views and suggestions to further expand them in a mutually beneficial manner, the official added.

The special secretary assured the industry that their inputs would be factored in the ongoing trade negotiations.

Senior representatives from industry bodies including Confederation of Indian Industry, FICCI, PHDCCI, India Cellular and Electronics Association and Assocham participated in the deliberations.

The first in-person meeting between India and the US after finalisation of terms of references (ToRs) for the BTA concluded last month.

India and the US are exploring opportunities for an interim trade arrangement in goods to secure an "early mutual wins" ahead of finalising the first phase of the proposed bilateral trade agreement by fall of this year.

Both the countries have initiated sectoral level talks and more engagements are planned from May end.

To give an impetus to the talks, India's chief negotiator Rajesh Agrawal, additional secretary in Department of Commerce, and Assistant US Trade Representative for South and Central Asia Brendan Lynch held a three-day meeting last month in Washington.

During the meetings in Washington, the teams deliberated on wide-ranging subjects including tariff (related to goods) and non-tariff matters.

These deliberations assume significance as the US has suspended the additional 26 per cent tariffs on India till July 9. Both nations want to take advantage of this window to push the trade talks. However, the 10 per cent baseline tariff imposed on the countries will continue to remain in place.

India is seeking duty concessions for labour-intensive sectors like textiles, gems and jewellery, leather goods, garments, plastics, chemicals, shrimp, oil seeds, chemicals, grapes and bananas in the proposed pact with America.

On the other hand, the US wants duty concessions in sectors like certain industrial goods, automobiles (electric vehicles particularly), wines, petrochemical products, dairy, agriculture items such as apples, and tree nuts, they said.

The US remained India's largest trading partner for the fourth consecutive year in 2024-25 with bilateral trade valued at $131.84 billion. The US accounts for about 18 per cent of India's total goods exports, 6.22 per cent in imports, and 10.73 per cent in the country's total merchandise trade.

With America, India had a trade surplus (the difference between imports and exports) of $41.18 billion in goods in 2024-25. It was $35.32 billion in 2023-24, $27.7 billion in 2022-23, $32.85 billion in 2021-22 and $22.73 billion in 2020-21. The US has raised concerns over this widening trade deficit.

In 2024, India's main exports to the US included drug formulations and biologicals ($8.1 billion), telecom instruments ($6.5 billion), precious and semi-precious stones ($5.3 billion), petroleum products ($4.1 billion), gold and other precious metal jewellery ($3.2 billion), ready-made garments of cotton, including accessories ($2.8 billion), and products of iron and steel ($2.7 billion).

Imports included crude oil ($4.5 billion), petroleum products ($3.6 billion), coal, coke ($3.4 billion), cut and polished diamonds ($2.6 billion), electric machinery ($1.4 billion), aircraft, spacecraft and parts ($1.3 billion), and gold ($1.3 billion).