India hopeful of closing bilateral trade pact with the US at the earliest

India remains hopeful of closing negotiations of the proposed bilateral trade agreement with the US “as quickly as possible” and is stepping up efforts to close free trade agreements with other countries as well while monitoring a possible surge in imports due to the reciprocal tariffs.

“We will try and close negotiations for the BTA as quickly as possible. We are hopeful we will be able to negotiate a good agreement with the US,” said a senior commerce ministry official, adding that the deadline for the first trance of the BTA is September to October 2025 or fall 2025. He indicated that the negotiations may be completed even before that.

Amidst concerns over the reciprocal tariffs by the US despite a 90-day surge, officials highlighted that India has already taken a path of trade liberalisation with the US and finalisation of the BTA, which will not only help grow India’s trade with the US but will also open a lot of opportunities for the two countries.

Virtual discussions on the BTA between the two countries are likely to start this week while in person negotiations will take place after the second week of May. “We are on schedule with the negotiations,” an official underlined.

In FY25, the US remained India’s top export destination with total exports amounting to $86.51 billion as against $77.52 billion in FY24.

Meanwhile, India is also working on trade pacts with several other countries including the European Union and could possibly consider an “early harvest” deal on the lines of the interim trade pact signed with Australia and what is proposed with the US, officials said.

“If some of the issues are not core to trade and may take more time to negotiate, it may be better to focus only on trade in the India EU FTA negotiations,” they explained, adding that they are discussing with the EU what can be an early harvest or first tranche of the FTA.

India and the European Union will hold the next round of negotiations for the proposed free trade agreement from May 12 to May 16 in New Delhi and aim to conclude the deal by the end of 2025.

Surge in imports:

The commerce ministry is also closely monitoring any possible surge in imports amidst concerns over dumping of goods due to the reciprocal tariffs by the US. As of now, there has not been surge of imports, officials noted.

A recent assessment highlighted the risk of merchandise dumping into India from countries like China, Vietnam and Indonesia due to the reciprocal trade tensions and rising US costs. There are also concerns that Chinese retaliatory tariffs on US goods could further increase the inflow of US agricultural products into India, officials explained.

An inter ministerial committee for import surge monitoring has been set up with representation from the commerce ministry, Directorate General of Foreign Trade, Central Board of Indirect Taxes and Customs and the Department for Promotion of Industry and Internal Trade. The committee is monitoring weekly as well as monthly import trend by commodities as well as countries.