Intro- India and the US have concluded advanced talks on the Bilateral Trade Agreement (BTA), targeting an interim pact before July 9 and a comprehensive deal by fall 2025. The discussions focused on digital trade, market access, regulatory alignment, and tariff reductions. In 2024–25, bilateral trade stood at US$ 131.84 billion, with the US remaining India’s largest trading partner. India has notably increased imports of oil and aircraft from the US. However, the US continues to face a US$ 45 billion trade deficit with India, which both nations are working to address through deeper economic cooperation and expanded trade flows.

India-US bilateral trade agreement talks are making progress toward an interim deal. Both nations have concluded advanced discussions on the proposed Bilateral Trade Agreement (BTA) during a week-long meeting held from June 4–10 in New Delhi. 

The US delegation, led by the Additional US Trade Representative, held in-depth meetings with Indian trade officials led by chief negotiator Mr. Rajesh Agrawal. Officials familiar with the proceedings described the discussions as “productive,” paving the way for an interim trade deal by the end of June and a broader agreement by fall 2025.

The two countries, having signed the Terms of Reference (ToR) on April 1—just a day before the scheduled implementation of reciprocal tariffs on April 2—engaged in sector-specific discussions during this round of negotiations. Several key trade and regulatory areas were addressed during the meeting. These included-

• Market Access: Both countries aimed to reduce tariffs and trade barriers to facilitate mutual access to goods and services.
• Digital Trade: The US raised concerns about India’s data localization norms and competition regulations, which US tech firms view as restrictive. (It is to be noted that India has traditionally been hesitant to include digital trade provisions in its trade deals. This changed with the India-UAE FTA in 2022, which introduced a detailed chapter on digital trade. A similar section was also incorporated into the India-UK FTA signed last month.)
• Technical Barriers to Trade (TBT) & Sanitary and Phytosanitary (SPS) Measures: These were prominent topics, particularly related to food safety standards and agricultural trade compliance. (The SPS deals with measures to protect human, animal and plant health from food-borne risks, animal or plant carried diseases and pests. The TBT deals with technical regulations, standards and procedures to comply with SPS.)
• Customs and Trade Facilitation: Discussions focused on simplifying customs procedures to reduce transaction costs and improve ease of doing business.
• Legal Framework: Both sides emphasized the need for a strong legal infrastructure to support long-term trade and investment.

Discussions covered tariffs on goods of key interest to both countries, including American exports like corn, soybeans, nuts, automobiles, and spirits, as well as Indian exports such as textiles, footwear, tea, and coffee. Talks also addressed rules of origin, which determine a product’s eligibility for preferential tariff treatment. 

Negotiators on both sides are aiming to finalize the first phase of the BTA by September–October 2025. However, an interim agreement may be signed earlier, possibly before July 9, to pre-empt the expiration of the US suspension on proposed tariffs affecting Indian goods. (On April 2, the United States imposed 26% reciprocal tariffs on Indian goods, followed by a 90-day suspension period, which is set to expire on July 9.) 

India is pushing for a complete exemption from a 26% reciprocal tariff as part of this interim deal.

President Donald Trump and Prime Minister Narendra Modi had previously agreed to finalize the Bilateral Trade Agreement (BTA) ‘by fall’ 2025, with a shared goal of increasing bilateral trade to US$ 500 billion by 2030. 

In 2024–25, the US continued to be India’s largest trading partner for the fourth consecutive year. Bilateral trade totalled US$ 131.84 billion, with the US accounting for 18% of India’s goods exports, 6.22% of its imports, and 10.73% of overall merchandise trade.

What India imports from the USA

India imports a diverse range of high-value products from the United States, spanning from critical energy resources and advanced technology to agricultural goods. The trade relationship underscores America’s role as a key supplier of sophisticated machinery, defense equipment, and essential commodities that fuel India’s growing economy. India’s major imports from USA include- 

• Mineral fuels, oils, distillation products
• Pearls, precious stones, metals, coins
• Machinery, nuclear reactors, boilers
• Aircraft, spacecraft
• Electrical, electronic equipment
• Optical, photo, technical, medical apparatus
• Plastics

India’s total imports from USA have witnessed a significant growth in the past 5 years. For the year 2020, total imports stood at US$ 26.6 billion, which grew to US$ 43.1 billion in 2024, exhibiting a CAGR of about 10.1% during the period 2022-2024.

Graph

Source: Tarde map

Notably, as is seen in the graph, overall imports reached a peak of US$ 51.8 Billion in 2022. Thereafter, imports have registered a decline for the subsequent two years, reaching US$ 43.1 billion in 2024.

Mineral fuels import that stood at US$ 6.9 Billion in 2020, has grown by 14.1%, reaching US$ 13.2 Billion in   2024. From US$ 4.5 Billion in 2020, the import of Natural/cultured Pearls has increased to US$ 4.9 Billion in 2024. Similarly, import of nuclear reactors & boilers, reached US$ 4.1 Billion in 2024, up from US$ 2.8 Billion in 2020.

Highest growth in imports was recorded for Aircraft, spacecraft, and parts thereof, where imports surged by 80.2%, rising from US$ 0.1 Billion in 2020 to US$ 1.4 Billion in 2024. Imports also increased for Electrical machinery and equipment, Opticals, Plastics, and Edible fruit and nuts, during the period 2020-2024.

Table: India’s top 10 imports from USA

Source: Trade map; Values in US$ Billion

While India has reduced tariffs on items like Bourbon whiskey and motorcycles, the US still faces a US$ 45 billion trade deficit with India—a gap President Trump is eager to close. To help address this, India is expected to increase imports of oil and defence equipment. Notably, India’s crude oil imports from the U.S. have increased by 11.49%, reaching US$ 63 billion in March 2025 as compared to the previous year, according to official trade data. With negotiations advancing steadily and both countries focused on securing “early wins,” prospects are strong for a balanced and mutually advantageous trade agreement.

TPCI – Article courtesy