India Confirms: First Tranche of India–US Trade Pact on Track For 2025 Completion

India remains optimistic about finalizing the first tranche of its much-anticipated Bilateral Trade Agreement (BTA) with the United States by the end of 2025, despite evolving global trade dynamics, including new U.S. reciprocal tariffs. Commerce Secretary Rajesh Agarwal shared this positive outlook during his address at the FICCI Annual General Meeting on Friday, noting that negotiations have advanced substantially over six rounds of virtual talks since the BTA was formally proposed in February 2025. The initial target was to conclude this phase by autumn 2025, but recent policy shifts in Washington—such as 50% duties on Indian exports, half tied to energy purchases from Russia—have necessitated parallel discussions on a broader BTA and an immediate Framework Trade Deal to address these tariffs.

Agarwal emphasized that while most sticking points have been ironed out, trade pacts are inherently unpredictable. "With any trade negotiations, the final deadlines cannot be because even if there is one sticking point or one sticking issue that is in the mind of even one of the partners, the trade deal may not meet that deadline," he cautioned, urging both sides to identify the "right landing zone" at a political level. India prioritizes eliminating these tariffs for its labor-intensive sectors like textiles and gems, while the U.S. seeks greater market access for industrial goods and agriculture. A recent visit by an Indian delegation, led by Agarwal, to Washington in October further accelerated progress on reciprocal duties and energy-related penalties.

The BTA, backed by directives from Prime Minister Narendra Modi and U.S. President Donald Trump, aims to more than double bilateral trade from the current $191 billion to $500 billion by 2030, bolstering supply chains in critical areas like semiconductors, pharmaceuticals, and clean energy. This first tranche is expected to focus on immediate tariff relief, potentially covering $48.2 billion in affected Indian exports, while laying groundwork for deeper integration. Commerce Minister Piyush Goyal recently echoed this momentum, stating that free trade pacts with the U.S. and EU could be finalized "soon" to enhance export volumes amid sustainability demands.

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Despite an 11.93% dip in India's September 2025 merchandise exports to the U.S. ($5.46 billion) due to tariffs—offset by an 11.78% rise in imports ($3.98 billion)—Agarwal stressed that the deal's "package" addressing duties is "more or less near closure." This optimism aligns with broader U.S.-India economic ties, where the U.S. remains India's largest trading partner, accounting for 18% of goods exports. As virtual talks continue, the agreement could serve as a bulwark against protectionist headwinds, fostering mutual growth in strategic sectors.

The potential pact underscores a resilient India-U.S. partnership post-Trump's reelection, with both nations navigating geopolitical shifts like the Russia-Ukraine conflict's energy ripple effects. If sealed by December, it would mark a diplomatic win, paving the way for comprehensive reforms and positioning India as a key counterweight to China's global trade dominance.

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