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India and the US are negotiating a Bilateral Trade Agreement to enhance market access and reduce trade barriers, with no reciprocal tariffs imposed by the US, the Parliament was told.
PM Narendra Modi with US President Donald Trump (Photo: AP)
India continues to engage with the United States, and both countries plan to negotiate to achieve enhancement and broadening of bilateral trade ties in a mutually beneficial and fair manner, the Parliament was informed on Tuesday.
In a written response to the Lok Sabha, Minister of State for Commerce and Industry Jitin Prasada said that as on date, reciprocal tariffs have not been imposed by the US on India.
This comes days after US President Donald Trump claimed that India had agreed to lower its import duties against the US because he had “exposed” the country.
“Both countries plan to negotiate a mutually beneficial, multi-sector Bilateral Trade Agreement. Both countries would focus on increasing market access, reducing tariff and non-tariff barriers, and enhancing supply chain integration,” Prasada said.
“This is an ongoing exercise and Indian exporters are working towards diversifying trade baskets and export destinations,” he said.
In a separate reply, the minister said India’s tariff policy aims to regulate trade, protect domestic industries, and generate revenue through taxes on imported and exported goods.
“Recent reforms have focused on streamlining the tariff structure and facilitating trade,” Prasada said.
“With the changing trade scenario, India is moving towards having Preferential/Free Trade Agreements wherein customs tariffs and non-tariff barriers are reduced or eliminated on substantial trade between the PTA/FTA members,” he added.
A day earlier, on Monday, Sunil Barthwal, Secretary of the Ministry of Commerce and Industry (Department of Commerce) briefed the department, Parliamentary Standing Committee on External Affairs on the Current Developments in India’s Foreign Trade and Policy, where he said to have told the panel that the US has not officially imposed any tariffs on India, unlike Mexico, Canada and China.
He also said India is still negotiating with the United States and has not made any commitments so far.
(Tariffs are import duties imposed and collected by the government and paid by companies to bring foreign goods into the country.)
During Prime Minister Narendra Modi’s visit to Washington last month, India and the US announced their commitment to more than double the two-way commerce to USD 500 billion by 2030 and negotiate the first tranche of a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA) by fall of 2025.
In 2023, the US-India bilateral trade in goods and services stood at USD 190.08 billion (USD 123.89 billion in goods and USD 66.19 billion in services trade).
That year, India’s merchandise exports to the US stood at USD 83.77 billion, while imports were USD 40.12 billion, leaving a trade gap of USD 43.65 billion in favour of India.
During 2021-24, America was India’s largest trading partner. The US is one of the few countries with which India has a trade surplus.
In 2023-24, India has exported engineering goods worth USD 17.62 billion. The other major goods included electronics (USD 10 billion), gems and jewellery (USD 9.9 billion), petroleum products (USD 5.83 billion), textiles (USD 4.7 billion), and marine products (USD 2.5 billion).
India is a member of the WTO (World Trade Organization) and bound to its maximum tariff that can be applied on a product category. The applied tariffs are generally below the bound tariff for a given commodity line.
At present, India is a member of 13 FTAs and 9 PTAs apart from the negotiations with the EU, the UK, and Oman.
