India is hopeful of finalising a “framework trade deal” with the United States by the end of this year, addressing the reciprocal tariff issue weighing on Indian exports, said Commerce Secretary Rajesh Agrawal on Friday.
The agreement, however, he said, would be “meaningful” for Indian exporters only if it tackled both sets of levies introduced in August — the 25 per cent reciprocal tariff and a further 25 per cent duty linked to India’s purchases of Russian oil. “We are close; we have tried to iron out most of the issues,” he said at the 98th Ficci annual meeting.
“It is only a matter of time before this decision is taken… It’s a call that will have to be taken at multiple levels,” said Agrawal. “…There is not much to negotiate. There are very few issues and a political call needs to be taken about some of them.”
In February, Prime Minister Narendra Modi and US President Donald Trump had announced the intention to finalise the first tranche of a mutually beneficial trade deal (Bilateral Trade Agreement, or BTA) by the fall of 2025, a target now appearing increasingly uncertain.
Agrawal said talks with the US were moving in parallel on two tracks: The broader BTA, which will take longer, and the framework deal that would address the 50 per cent tariff burden on exporters. “…These are two separate parallel negotiations going on, but one will feed into the other. What needs to come first is the framework trade deal which is able to address the reciprocal tariffs,” said the commerce secretary. However, India will continue to stand for its sensitivities, and its non-negotiables.
At the same event, Commerce and Industry Minister Piyush Goyal spoke of the need for reliable partners in an increasingly edgy trade landscape. “We have all seen trade being weaponised. We have all seen the importance of having trusted partners around the world,” he said, noting that India is simultaneously in talks with “about 50” countries or blocs.
Goyal added that the six-nation Gulf Cooperation Council was showing renewed interest, with negotiations with Oman nearly finished and Bahrain and Qatar stepping forward.
New Delhi has already implemented a comprehensive pact with the UAE and is in discussions from the Gulf to New Zealand, reflecting its widening search for dependable trading partners.
“We are in active discussions with the US and with the 27-nation European Union,” said the minister. Agrawal in his address noted that talks with the European Union are “in the last lap” and could be wrapped up by January 2026.
Talks between New Delhi and Washington are on virtually and on a regular basis, Agrawal said. Negotiations were launched in March and till now half a dozen rounds of negotiations have been held, with the last informal round being from 15-17 October in Washington. A team of officials from Washington may travel to New Delhi for further discussions.
Despite the lack of a deal and high tariffs, India’s exports to the US have risen by $10 billion this year, said the official. The industry is working towards diversification to deal with the tariffs.
At home, though, the trade deficit widened to a record $41.68 billion in October as gold imports trebled and outbound shipments dropped the most in 14 months. The commerce secretary, however, said the deficit was not yet “in the worrying zone”. “If you look deep down, one of the key drivers for the trade deficit in October was precious metal imports. The pent-up demand was met in October, and that led to an increase in deficit. Two, we had comparatively lower energy prices impacting the trade deficit on the positive side, but very high precious metal prices, impacted the trade deficit on the higher side,” he added.
With inputs from PTI
India-Canada trade deal talks from next week
India and Canada will open discussions next week to resume formal negotiations for the Comprehensive Economic Partnership Agreement(CEPA), said Commerce and Industry Minister Piyush Goyal. The move follows a meeting between Prime Minister Narendra Modi and his Canadian counterpart, Mark Carney, last Sunday on the sidelines of the G20 Summit in Johannesburg, where the two leaders agreed to deepen cooperation in trade, investment, technology and innovation, energy, education, defence and the space sector. Talks are poised to restart after a hiatus of more than two years, during a period marked by a strained bilateral relationship.
