Trade pact with India will help open new markets for American goods: USTR

New Delhi: The proposed trade pact with India will help open new markets for American goods and create new opportunities for workers, farmers, and entrepreneurs in both countries, the USTR said on Tuesday.

US Trade Representative (USTR) Jamieson Greer said that there is a "serious" lack of reciprocity in the trade relationship with India.

The USTR also welcomed Vice President J D Vance and Prime Minister Narendra Modi's statement reaffirming the importance of the India-US COMPACT (Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology) initiative and highlighting the progress in the negotiations for a Bilateral Trade Agreement (BTA), launched by both nations on February 13.

"These ongoing talks will help achieve balance and reciprocity by opening new markets for American goods and addressing unfair practices that harm American workers. India's constructive engagement so far has been welcomed and I look forward to creating new opportunities for workers, farmers, and entrepreneurs in both countries," he said.

Vance is in India on a four-day visit.

The two countries are aiming to finalise the first phase of the pact by the fall (September-October) this year. India and the US have finalised the terms of reference outlining the roadmap for negotiations of the proposed BTA, according to the USTR statement.

"I am pleased to confirm that USTR and India's Ministry of Commerce and Industry have finalised the Terms of Reference to lay down a roadmap for the negotiations on reciprocal trade," Ambassador Greer said.

According to the USTR, the United States is looking at increasing market access, reducing tariffs and non-tariff barriers, and negotiating a robust set of additional commitments to ensure long-term benefits.

The US has long recognised significant trade barriers with India and as a result, the US ran a $45.7 billion goods trade deficit with India in 2024, a 5.1 per cent ($2.2 billion) increase over 2023, the statement said.

The US' total goods trade with India was estimated at $129.2 billion in 2024. According to the US, India's average applied tariff is 17 per cent, among the highest of the world's largest economies, while America's average applied tariff is 3.3 per cent.

India's average applied tariff rate on agricultural products is 39 per cent while the USA's is just 5 per cent.

"In addition to tariffs, technical barriers to trade, regulatory barriers, and restrictions on access to the market in the services, industrial, and agricultural sectors also reduce US exports to India," it said.

On April 2, President Trump imposed a 10 per cent tariff on all countries and individualised reciprocal higher tariffs on nations with which the US has the largest trade deficits in order to level the playing field.

"The ToR (Terms of Reference) announcement with India is a critical step forward in negotiations with India to achieve reciprocal trade with one of our most strategic partners and deliver results to the American People," the statement said.

ToRs include issues such as tariffs, non-tariff barriers, rules of origin, and customs facilitation.