Reciprocal Tariffs
Notable progress in India-US trade pact talk, announcement very soon
This story was originally published at 13:19 IST on 26 May 2025
Register to read our real-time news.Informist, Monday, May 26, 2025
By Krity Ambey
NEW DELHI – India and the US covered significant ground in their negotiations for a trade deal last week during Commerce and Industry Minister Piyush Goyal's visit to Washington, according to a person aware of the matter. The announcement of the first tranche of the deal is expected to be made by the prime minister's office very soon, the person said, without giving a definitive timeline.
Under the trade deal, which is India's only hope to insulate its exports from the US' reciprocal tariffs, New Delhi aims to lower its weighted average tariff on US goods below 4% from close to 8% currently, the person told Informist. Both sides have reached broad consensus on tariff-related issues, which are of immediate importance and would be included in the first tranche of the deal, the person added.
The trade deal with the US would be signed in three tranches with the conclusion of the first tranche before July to avoid the reciprocal tariffs, the person said. Washington has proposed an extra duty of 26% on Indian goods, likely to be effective Jul. 9.
During Goyal's visit to Washington last week, India and the US agreed to expedite the discussions for the proposed bilateral trade agreement. A team of commerce ministry officials, including chief negotiator Special Secretary Rajesh Agrawal, accompanied Goyal.
As the negotiations continued last week among officials from India and the US, Goyal also held two meetings with the US Commerce Secretary Howard Lutnick. After meeting Lutnick at the end of the trip, Goyal posted on the social media platform X, formerly Twitter, "Held a constructive meeting for a mutually beneficial trade agreement".
India and the US are engaged in discussions for a bilateral trade agreement since February, following Prime Minister Narendra Modi's visit to the White House. Initially, the two nations had set a deadline of fall 2025 for the conclusion of the first tranche of the trade deal.
The reciprocal tariffs could significantly hurt India's exports growth as the US is the top destination for the country's exports. Indian exports to the US in 2024 were worth $80.77 billion, and India had a trade surplus of $36.35 billion with the US in that year, according to the data available with the commerce ministry. End
US$1 = INR 85.01
Edited by Deepshikha Bhardwaj
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