India and the United States are at an advanced stage in India-US Bilateral Trade Agreement (BTA), according to a confirmation made by Commerce and Industry Minister Piyush Goyal on Monday.
This announcement highlights a significant push in diplomatic and economic efforts to remove trade barriers and establish a more predictable commercial environment between the two largest democracies. The progress follows a recent two-day visit to India by a high-level US delegation, led by Deputy Trade Representative Rick Switzer, which concluded on December 11. During these deliberations, both sides intensively reviewed the negotiating progress and assessed the feasibility of quickly finalizing the initial phase of the agreement.
Goyal emphasized the focus on solidifying a structured trade relationship with the US, stating, “We are already at an advanced stage in our discussions with the US.” His remarks were made to the media after the successful conclusion of the India–New Zealand Free Trade Agreement (FTA) negotiations.
Strategic Context: India’s Deepening Western Economic Ties
The urgency in the US-India BTA talks is contextualized by India’s broader and successful push to expand its trade footprint across key Western economies. Goyal notably highlighted India’s recent achievement of concluding comprehensive free trade agreements with three of the Five Eyes (FVEY) intelligence alliance members: Australia, the United Kingdom, and New Zealand. This trio of FTAs solidifies India’s deepening economic integration with key Western powers.
The Five Eyes grouping, comprising Australia, Canada, New Zealand, the UK, and the US, is a critical geopolitical and economic bloc. India’s progress with three members highlights its rising strategic and economic importance globally. Furthermore, the Indian government is actively preparing to re-engage Canada on a bilateral trade pact. “We are soon going to launch discussions for the Terms of Reference (ToR) with Canada as well,” Goyal confirmed, asserting that this diplomatic momentum reflects India’s rising strategic importance in global geopolitics.
The Immediate Focus: Concluding the First Tranche of the INDIA-US Bilateral Trade Agreement
The current negotiations between India and the US are laser-focused on finalizing the first tranche of a Bilateral Trade Agreement (BTA). The drive for this initial phase has gained particular urgency as a response to past trade frictions, most notably the elevated tariffs imposed by the Trump administration, which saw duties of up to 50 percent levied on specific Indian goods entering the US market. The tariffs imposed by the US are significantly increasing costs for Indian exporters especially in sectors like textiles and pharmaceuticals making their goods less competitive and pressuring profits.
Although Indian companies are trying to diversify markets, the US remains an indispensable trade partner due to its massive consumer base and stable business infrastructure.
Therefore, the proposed INDIA-US Bilateral Trade Agreement (BTA) is considered essential. It is intended to stabilize the trade environment, eliminate persistent tariffs and non-tariff barriers, and create a predictable, rules-based framework. This long-term predictability is crucial for Indian businesses to plan future investment, production, and job creation, mitigating the risks posed by sudden policy shifts.
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