India-US Bilateral Trade Agreement Expected to Finalize First Phase by End of 2025

India and the United States are progressing toward finalizing the first portion of their bilateral trade agreement by the end of 2025, according to Commerce Secretary Rajesh Agarwal.

At the FICCI Annual General Meeting on Friday, Agarwal expressed optimism regarding the trade negotiations, stating, "We are very optimistic and hopeful that we should find a solution within this calendar year."

Despite his positive outlook, the Commerce Secretary acknowledged the unpredictable nature of trade negotiations, explaining that even a single unresolved issue could prevent meeting the established deadline.

Initially, both countries aimed to complete the first phase of the India-US bilateral trade agreement by fall 2025. However, recent developments in US trade policy, particularly regarding tariffs, have necessitated adjustments to the original timeline.

Agarwal highlighted significant shifts in the global trade landscape, noting, "One of the key issues has been in the US landscape, where it came out with reciprocal tariffs, which were imposed on all the trading partners..."

In response to these changes, India and the US are now simultaneously pursuing two negotiation tracks: a comprehensive Bilateral Trade Agreement (BTA) and a more immediate Framework Trade Deal designed to address the high tariffs recently imposed on India.

The framework discussions have made substantial progress, with Agarwal reporting that most issues have been resolved. "Now it is only a matter of time when this decision has to be taken, that is, when the two countries have to find the right landing zone to announce it," he said.

Regarding the broader agreement, the Secretary stated, "I think we need to find a pathway for the complete elimination of reciprocal tariffs in our process of doing (full) BTA. So I think that will take a bit of time, and we'll not hurry up those we are working on various aspects of BTA." Nevertheless, he reiterated expectations for finalizing the first portion of the BTA very soon.

Agarwal concluded by expressing confidence in the negotiations, saying they are in a position where an agreement can be achieved "in a very short while."

The BTA, formally proposed in February following directives from leadership in both nations, aims to more than double bilateral trade from the current $191 billion to $500 billion by 2030. The talks were initially announced during Prime Minister Narendra Modi's visit to Washington earlier this year.

Negotiations have continued despite recent tariff escalations by the United States. US President Donald Trump imposed a 25 percent tariff on Indian goods starting August 1, followed by an additional 25 percent increase shortly thereafter, citing India's continued purchase of Russian oil. The US had implemented reciprocal tariffs on several countries with which it maintains trade deficits.