Negotiations on a new trade agreement between India and the US, emphasis on reduction of tariffs and import duties

In Parliament on Tuesday, Minister of State for Commerce and Industry Jitin Prasada emphasized the need for opening new trade ties with the US by India. He informed that India and the US are negotiating a new trade pact, whose basic purpose is to increase trade between the two countries. He informed that the pact includes increasing market access, reducing import duties, and other non-tariff barriers, and simplifying the supply chain.

Minister Prasad said that till now the US has not imposed any tariff (customs duty) on India and both countries are negotiating to increase mutual trade relations. He informed that the US had issued a memorandum in February, which said that if unequal trade agreements are adopted by a country, which causes loss to the US, then the US can take action against that country.

Besides, the minister informed that as per 2023, India's average duty rate is 17%, the average duty on agricultural products is 39%, and on industrial products is 13.5%. After the Union Budget 2025-26, the duty on industrial products has come down to 10.66%. Now we talk about India's major export products, which include pearls, petroleum products, telecommunication equipment, gold jewelry, iron steel, cotton fabrics, and electronic parts.

The two-way trade between the US and India in 2023 was $190 billion, which included $123 billion in trade of products and $66 billion in trade of services. India's exports to the US in 2023 were $83 billion and imports from the US were $40 billion. The trade balance between the two countries is approximately $43 billion in India's favor. India is also a part of 13 free trade agreements and nine PTA agreements. Talks are also ongoing with the European Union, Britain, and Oman in this context.