India and US Eye Progress on Trade Agreement Amid Trump’s Tariff Pause

 New Delhi, April 12, 2025 – India and the United States are poised to advance negotiations on a proposed Bilateral Trade Agreement (BTA), leveraging a 90-day tariff suspension announced by the Trump administration. A senior Indian government official indicated that both nations have finalized the terms of reference for the talks, raising hopes for concluding key aspects of the deal by July 9.

“There are a lot of possibilities to finalize low-hanging fruits. There are a lot of possibilities to finalize the form and shape of the BTA,” the official stated, emphasizing that a “win-win” outcome could be achievable within the 90-day window. The official added, “The work has started. India is far ahead of other countries in negotiating a trade deal,” highlighting India’s proactive engagement with U.S. counterparts.

The negotiations aim to lay the groundwork for the first phase of the agreement by fall 2025, with an ambitious target to more than double bilateral trade to $500 billion by 2030, up from the current $191 billion. In 2023-24, the U.S. was India’s largest trading partner, with goods trade reaching $119.71 billion, including $77.51 billion in exports, $42.19 billion in imports, and a $35.31 billion trade surplus for India.

The talks come in the wake of shifting U.S. trade policies. On April 2, the U.S. imposed an additional 26% tariff on Indian goods, but this was suspended on April 9 for 90 days, leaving a baseline 10% tariff in place. The pause, announced by President Donald Trump, was framed as a response to global outreach. Trump stated, “Conversely, and based on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately. Thank you for your attention to this matter!”

India is adopting a strategic approach, building on discussions initiated during Prime Minister Narendra Modi’s visit to the U.S. earlier this year, where the trade agreement was first proposed. The government is keen to capitalize on the tariff reprieve to address trade barriers and enhance market access, particularly in sectors like technology, agriculture, and manufacturing.

As negotiations progress, both nations are focused on fostering a mutually beneficial framework that strengthens economic ties. With India positioning itself as a key player in global trade talks, the outcome of these discussions could significantly shape bilateral relations and set a precedent for future agreements.