India and the United States are not only close strategic allies but also complementary market economies, a senior official from India's Commerce Ministry said, as the nations progress towards a bilateral trade agreement via mutual visits and negotiations.
“The depth of the India-US relationship still has a long way to go to match its full potential,” the official said in a statement. “The Bilateral Trade Agreement is designed to enhance and expand our trade, technology, and economic ties in a mutually beneficial manner.”
The remarks come as both nations officially finalise the terms of reference for trade negotiations — a crucial step in laying the groundwork for a broader deal.
“The US and India are hard at work on a trade agreement built on shared priorities. Finalizing the ToRs is a vital step toward a final deal," US Vice President JD Vance posted on X.
Negotiations are expected to intensify in the coming months, with both sides aiming to conclude an early harvest deal before the end of the year.
Trade Think-Tank Flags Concerns
According to Ajay Srivastava of think-tank Global Trade Research Initiative (GTRI), the terms of reference have not been made public, but their contours are becoming clearer.
GTRI suggests that due to the US lacking Fast Track Authority, Washington cannot offer tariff cuts. Indian goods may continue facing standard baseline 10% tariff, plus the Most Favoured Nation duties. In exchange, India could be asked to lower tariffs on American farm goods, cars, and industrial products—terms that may apply exclusively to the US.
Such exclusive deals would mark a departure from India's current FTA approach, where tariff cuts are non-exclusive. GTRI also warns that stringent origin rules could limit the use of Chinese components, adding pressure on Indian exporters.
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