India and the US will finalise the contours, schedule of negotiations and terms of reference of the proposed bilateral trade agreement (BTA) during the three-day talks, starting Tuesday, an official said.
The agreement would be finalised in two tranches and the first phase is expected to focus on issues pertaining to goods trade, but by end of this week there will be full clarity on it, the official said.
The official added that since the US is a developed economy, a trade agreement with India would bring more predictability in tariffs, regulations, and economic integration.
A good trade deal can create a lot of synergy for "lot of two-way trade and investments," the official said.
To formally start the negotiations on the agreement, Assistant US Trade Representative for South and Central Asia Brendan Lynch, along with a team of officials, will be visiting India from March 25-29.
During the three-day deliberations, "We will be finalising the contours of the BTA and will discuss the terms of reference of the BTA, besides working on some of the aspirations that we want to meet under the tranche one and two of the pact," the official said.
The two countries are targeting to conclude the first phase or tranche of the agreement by fall of 2025.
The official, however, clarified that this week's talk is not the first round of negotiations.
"We will try to finalise the schedule of negotiations as in how we will start first round, second round etc. We have been engaging virtually on BTA but now formally we are getting into the mode, where we will be entering into the negotiations," the official said.
Normally in such trade pacts, two countries either significantly reduce or eliminate import duties on maximum (90-95 per cent) number of goods traded between them. Besides, they ease norms to promote trade in services and boost investments.
While the US has demanded greater market access in sectors like certain industrial goods, auto, wines and agriculture, India may look at duty cuts for labour intensive sectors like textiles.
As the timeline to conclude the first phase is ambitious, "we have to package what we can achieve in that limited time frame. We should not over-commit," the official added.
The officials of the two countries would also deliberate on issues to be included in the second phase of the agreement.
The visit of the US team comes against the backdrop of President Donald Trump's plan to impose reciprocal tariffs on countries including India. He has on multiple forums stated that India imposes high tariffs on US goods.
Tariffs are import duties imposed and collected by government and paid by the companies to bring foreign goods into the country.
Commerce and Industry Minister Piyush Goyal held talks with US Trade Representative (USTR) Jamieson Greer and US Commerce Secretary Howard Lutnick during his three-day visit to Washington earlier this month.
According to trade experts, there are uncertainties about how the Trump administration will impose the reciprocal duties.
Trade agreements have been a successful route to reduce tariffs bilaterally. The reciprocal tariff policy decision is for all the countries and not only for India.
The teams are also expected to discuss issues pertaining to services too.
On opening up of agri sector, a source said there are sensitivities. The US is an exporter of agri goods like wheat.
"We have to look at each other's strengths, weaknesses and sensitivities and try to find common ground. The idea of a trade deal is always to find areas which are agreeable," the source said adding long-term predictability in tariff and investment climate, and regulatory climate help businesses.
During the visit of Prime Minister Narendra Modi to Washington, India and the US announced their commitment to more than double the two-way commerce to USD 500 billion by 2030 and negotiate the first tranche of a mutually beneficial, multi-sector BTA by fall of 2025.
Goyal had earlier stated that the two countries can offer concessions and duty reductions, as their economies complement each other.
During the first term of US President Trump, the two countries had discussed a mini-trade deal, but it was shelved by the Joe Biden administration as they were not in favour of such pacts.
In 2023, the US-India bilateral trade in goods and services stood at USD 190.08 billion (USD 123.89 billion in goods and USD 66.19 billion in services trade).
The country's services export to America was USD 36.33 billion in 2023, while imports aggregated at USD 29.86 billion.
In 2023-24, the US was the largest trading partner of India with USD 119.71 billion bilateral trade in goods (USD 77.51 billion worth of exports, USD 42.19 billion of imports, with USD 35.31 billion trade surplus).
India has received USD 67.8 billion in foreign direct investments from America during April 2000 and September 2024.
India faces high US tariffs on many labour-intensive goods like textiles, garments, and footwear, ranging between 15-35 per cent on several products. The US has already announced non-reciprocal tariffs of 25 per cent on steel and aluminium.
In 2024, India's main exports to the US included drug formulations, biological (USD 8.1 billion), telecom instruments (USD 6.5 billion), precious and semi-precious stones (USD 5.3 billion), petroleum products (USD 4.1 billion), gold and other precious metal jewellery (USD 3.2 billion), ready-made garments of cotton including accessories (USD 2.8 billion), and products of iron and steel (USD 2.7 billion).
Imports included crude oil (USD 4.5 billion), petroleum products (USD 3.6 billion), coal, coke (USD 3.4 billion), cut and polished diamonds (USD 2.6 billion), electric machinery (USD 1.4 billion), aircraft, space crafts and parts (USD 1.3 billion), and gold (USD 1.3 billion).
Brendan Lynch, the assistant US trade representative for South and Central Asia, will pay a five-day visit to India beginning Tuesday, days before US President Donald Trump's tit-for-tat tariff kicks in.
The senior US trade official is expected to hold talks with Commerce Minister Piyush Goyal besides meeting a number of senior Indian officials.
It is learnt that Indian officials are also hoping to discuss with Lynch the possibility of a waiver for India from the reciprocal tariff temporarily.
It will come into effect on April 2.
The two sides are also expected to hold negotiations to firm up a framework for a bilateral trade pact that would address issues relating to levies and market access.
Assistant US Trade Representative for South and Central Asia Brendan Lynch, along with a team of US government officials, will be in India from March 25-29 for meetings with Indian interlocutors as part of ongoing bilateral trade discussions," said a US official.
"This visit reflects the United States' continued commitment to advancing a productive and balanced trade relationship with India.
"We value our ongoing engagement with the Government of India on trade and investment matters and look forward to continuing these discussions in a constructive, equitable and forward-looking manner," the official said.
India on Friday said its negotiations with Washington are underway to firm up a framework for a bilateral trade pact that would address issues relating to levies and market access.
India remains engaged with the US Administration at "various levels" to arrive at a mutually beneficial trade agreement, External Affairs Ministry spokesperson Randhir Jaiswal said.
The US president's tariff tussle has stoked fears of a global trade war with many countries already announcing counter-measures to deal with it.
In its Union budget for 2025-26, India announced its decision to lower tariffs on Bourbon whiskey, wines, and Electronic Vehicle (EV) segments.
The decisions were seen as an attempt to send a signal to the Trump administration that New Delhi is open to bringing down tariffs in specific sectors.
Washington is also pushing New Delhi to buy more American oil, gas and military platforms to bring down the trade deficit that stands at around USD 45 billion in India's favour.
The US was the largest trading partner of India with overall bilateral trade in goods and services amounting to USD 190 billion for the calendar year 2023.
In the financial year 2023-24, the US was the third largest source of foreign direct investment (FDI) into India with inflows of USD 4.99 billion accounting for almost per cent of total FDI equity inflows.
© 2025