New Delhi, Apr 15 (PTI) India has decided to follow the trade liberalisation path with the US, and both countries are negotiating a bilateral trade agreement (BTA) for which in-person talks are expected to begin next month, senior government officials said on Tuesday.
India and the US are starting negotiations in virtual mode this week. They have also finalised and signed the terms of reference (ToRs) for the pact.
India and the US have been engaged in negotiating a bilateral trade agreement (BTA) since March. Both sides have targeted to conclude the first phase of the pact by the fall (September-October) of this year, with an aim to more than double the bilateral trade to USD 500 billion by 2030 from about USD 191 billion currently.
Negotiations of the various track groups for the pact will start virtually this week.
"We hope to get into physical mode of negotiations maybe in the second half of May. So we are on schedule as far as the BTA and its negotiations are concerned," Additional Secretary in the Department of Commerce Rajesh Agrawal told reporters here. He is also the chief negotiator of India for this pact.
Speaking on the agreement, Commerce Secretary Sunil Barthwal said that the agreement, if finalised, will open huge opportunities for both India and US businesses.
"...There are both concerns as well as opportunities for India in terms of the current tariffs (globally). India has already taken a path, where we will be going for trade liberalisation with the US. There is a clear pathway which we have decided at the leaders' level, and then subsequently meetings have been held.
"Negotiations are going on and we have taken a path of trade liberalisation and BTA. So if we follow that path, then I think not only India's trade with the US will grow...that will also open up opportunities for India and for the US as well, he said.
Barthwal added that both countries will gain from this BTA and that is the assumption based on which such trade agreements are finalised and negotiated.
Citing examples of India's trade pacts with Australia and the UAE, he said India's trade has improved with the countries.
"So, I expect that a lot of opportunities will come, and there will be a higher trade with the US in case this BTA materialises," Barthwal said.
India, he said, is also looking at non-tariff barriers as well as tariff barriers in the agreement. If these barriers are reduced by both sides, it will lead to higher trade growth for the US and India.
"We will try to see that negotiations close as quickly as possible with the US. That is the path we have taken. So I am very hopeful that we will be able to negotiate a good BTA with the US," he added.
In a trade pact, two countries either significantly reduce or eliminate customs duties on the maximum number of goods traded between them. They also ease norms to promote trade in services and boost investments.
While the US is looking at duty concessions in sectors like certain industrial goods, automobiles (electric vehicles particularly), wines, petrochemical products, dairy, and agriculture items such as apples, tree nuts, and alfalfa hay; India may look at duty cuts for labour-intensive sectors like apparels, textiles, gems and jewellery, leather, plastics, chemicals, oil seeds, shrimp, and horticulture products.
From 2021-22 to 2023-24, the US was India's largest trading partner.
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 bilateral trade.
With America, India had a trade surplus (the difference between imports and exports) of USD 35.32 billion in goods in 2023-24. This was USD 27.7 billion in 2022-23, USD 32.85 billion in 2021-22, USD 22.73 billion in 2020-21, and USD 17.26 billion in 2019-20.
In 2024, India's main exports to the US included drug formulations and biologicals (USD 8.1 billion), telecom instruments (USD 6.5 billion), precious and semi-precious stones (USD 5.3 billion), petroleum products (USD 4.1 billion), gold and other precious metal jewellery (USD 3.2 billion), ready-made garments of cotton, including accessories (USD 2.8 billion), and products of iron and steel (USD 2.7 billion).
Imports included crude oil (USD 4.5 billion), petroleum products (USD 3.6 billion), coal, coke (USD 3.4 billion), cut and polished diamonds (USD 2.6 billion), electric machinery (USD 1.4 billion), aircraft, spacecraft and parts (USD 1.3 billion), and gold (USD 1.3 billion).
When asked if the US trade talks may delay other negotiations, the commerce secretary said the ministry has built capabilities to deal with several FTAs simultaneously.
There are separate chief negotiators dealing with different trade agreements.
"What we believe is that all FTAs are important for us...it improves trade atmosphere between two countries and we are showing same earnestness for all FTAs," he said, adding that the change in the global trading order will always give some opportunities and some concerns to India.
The ministry is fully engaged with all the concerned stakeholders on the issue.
He also said that if India and the US agree, it is possible to conclude the negotiations before the fall of this year.
"If we are able to do it early, it is good for us and the US. But that will depend on the pace of negotiations," Barthwal said.
On the issue of the US officials misrepresenting trade figures with India, he said negotiations are based on right facts whatever is existing on the ground and the data that is being exchanged.
The BTA talks progress on those lines.
US President Donald Trump has claimed that the US trade deficit with India is USD 100 billion, whereas India's official data places it under USD 45 billion.