India and the United States are making substantial progress towards finalising a Bilateral Trade Agreement as the deadline for US reciprocal tariffs approaches on April 2. Following an intervention by the Prime Minister’s Office, India has agreed to the Terms of Reference (ToR) for negotiations, paving the way for future discussions. The ToR establishes the foundation for the trade agreement and requires approval from the highest political authority before actual negotiations may commence.
After four days of deliberations, US officials left India without finalising the Terms of Reference. However, both countries have finally achieved an agreement, clearing the stage for formal negotiations. India is anticipated to reduce tariffs on certain American items in exchange for trade concessions from the US. President Donald Trump recently stated that India is willing to lower tariffs, indicating a positive development in the ongoing negotiations.
Meanwhile, the US Trade Representative (USTR) expressed many reservations regarding India’s trade policy. These include agricultural and genetically modified product import bans, internet shutdowns, and medical device pricing limitations. Former Indian trade official Ajay Srivastava warned that while India should join in trade discussions, it must prioritise national interests and ensure that accords are consistent with its economic and social goals.
