India-US To Negotiate Trade Agreement, Target USD 500 Bn In Commerce By 2030

New Delhi, Mar 12 (KNN) Minister of State for Commerce and Industry Jitin Prasada informed Parliament on Tuesday that India and the United States are planning to negotiate a mutually beneficial trade agreement focusing on increasing market access, reducing tariff and non-tariff barriers, and enhancing supply chain integration across multiple sectors.

In a written reply to the Lok Sabha, Prasada clarified that the United States has not imposed reciprocal tariffs on India despite concerns following the US Memorandum on Reciprocal Trade and Tariffs issued on February 13. 

This memorandum directed the Secretary of Commerce and United States Trade Representative to investigate potential harm to American interests from non-reciprocal trade agreements with trading partners and propose detailed remedies.

During Prime Minister Narendra Modi's visit to Washington last month, both nations announced their commitment to more than double bilateral commerce to USD 500 billion by 2030. 

The countries also pledged to negotiate the first tranche of a Bilateral Trade Agreement by fall 2025, aiming to strengthen economic ties.

Bilateral trade between the US and India reached USD 190.08 billion in 2023, comprising USD 123.89 billion in goods and USD 66.19 billion in services. 

India's merchandise exports to the US stood at USD 83.77 billion, while imports were USD 40.12 billion, resulting in a trade surplus of USD 43.65 billion in India's favor. 

The United States held the position of India's largest trading partner during 2021-24 and remains one of the few countries with which India maintains a trade surplus.

Prasada emphasised that India continues to engage with the US to enhance bilateral trade relations in a mutually beneficial and equitable manner. 

He noted that Indian exporters are actively working toward diversifying their trade portfolios and export destinations. 

In 2023-24, India's major exports to the US included engineering goods worth USD 17.62 billion, electronics (USD 10 billion), gems and jewelry (USD 9.9 billion), petroleum products (USD 5.83 billion), textiles (USD 4.7 billion), and marine products (USD 2.5 billion).

In a separate response, the minister explained that India's tariff policy aims to regulate trade, protect domestic industries, and generate revenue through taxes on imported and exported goods. 

Recent reforms have focused on streamlining the tariff structure and facilitating trade. 

As a World Trade Organisation member, India is bound by maximum tariff limits for product categories, with applied tariffs generally remaining below these bound rates.

Prasada added that India is adapting to the changing global trade landscape by pursuing Preferential and Free Trade Agreements to reduce or eliminate customs tariffs and non-tariff barriers with partner countries. 

Currently, India is a member of 13 Free Trade Agreements and 9 Preferential Trade Agreements, with ongoing negotiations with the European Union, the United Kingdom, and Oman.

(KNN Bureau)