Representative image indicating India-US trade
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Both sides have aimed at concluding the first phase by by fall (September-October) of this year.
India and the US have decided to hold sector-specific talks in the coming weeks under the agreement (BTA).
The engagement between the two countries came in the backdrop of the USA's threat to impose reciprocal tariffs on its key trading partners, including India, on April 2.
The decision to hold discussions in the coming weeks follows four days of talks -- between senior officers of India and the US -- which concluded here on March 29.
The sources said the first phase of the agreement may focus on goods' sectors and issues pertaining to services may come up in the second tranche. The agreement would be finalised in two tranches.
A team of US officials, headed by Assistant US Trade Representative for South and Central Asia Brendan Lynch, was here to finalise the contours and terms of references of the proposed pact, aimed at more than doubling the bilateral trade to $500 billion by 2030.
The official-level talks received a boost after US President Donald Trump on March 28 described Prime Minister Narendra Modi as a "very smart man" while emphasising that tariff talks would "work out very well between India and our country".
In a trade pact, two countries either significantly reduce or eliminate customs duties on the maximum number of goods traded between them. They also ease norms to promote trade in services and boost investments.
While the US is looking at duty concessions in sectors like certain industrial goods, automobiles (electric vehicles particularly), wines, petrochemical products, dairy, agriculture items such as apples, tree nuts, and alfalfa hay; India may look at duty cuts for labour-intensive sectors like textiles.
Indian industry and exporters have asked the government to protect them against the USA's reciprocal tariffs. They have sought exemption from those tariffs as it would hurt them severely as the US is India's largest trading partner.
The US is pushing India to negotiate a large and grand bilateral trade agreement while seeking to open the agriculture sector for American businesses.
According to trade experts, India is unlikely to include dairy and agriculture in trade negotiations as it is a politically sensitive sector.
The US agri exports to India was $1.6 billion in 2024. Key exports include almonds (in shell -- $868 million); pistachios ($121 million), apples ($21 million), ethanol (ethyl alcohol $266 million).
In 2024, India's main exports to the US included drug formulations, biological ($8.1 billion), telecom instruments ($6.5 billion), precious and semi-precious stones ($5.3 billion), petroleum products ($4.1 billion), gold and other precious metal jewellery ($3.2 billion), ready-made garments of cotton including accessories ($2.8 billion), and products of iron and steel ($2.7 billion).
Imports included crude oil ($4.5 billion), petroleum products ($3.6 billion), coal, coke ($3.4 billion), cut and polished diamonds ($2.6 billion), electric machinery ($1.4 billion), aircraft, space crafts and parts ($1.3 billion), and gold ($1.3 billion).
In 2023-24, the US was the largest trading partner of India with $119.71 billion bilateral trade in goods ($77.51 billion worth of exports, $42.19 billion of imports, with $35.31 billion trade surplus).
India has received $67.8 billion in foreign direct investments from America during April 2000 and September 2024.