Goyal meets US commerce secretary in Washington to discuss proposed trade pact

New Delhi: Commerce and Industry Minister Piyush Goyal on Friday held his second meeting with US Commerce Secretary Howard Lutnick in Washington to discuss the proposed bilateral trade agreement currently under negotiation between the two countries.

On May 20 also, Goyal held a meeting with Lutnick to expedite the talks on the first phase of the trade pact.

"Held a constructive meeting with Secretary @HowardLutnick for a mutually beneficial trade agreement. Committed to enhancing opportunities for our businesses and people," Goyal said in a post on X.

The meeting assumes significance as both the countries are looking at finalising an interim trade pact by July 8.

The four-day discussions between the chief negotiators have also concluded in Washington on May 22.

In the interim trade deal, New Delhi is pushing for full exemption from the 26 per cent reciprocal tariff on Indian goods.

The US on April 2 imposed an additional 26 per cent reciprocal tariff on Indian goods but suspended it for 90 days till July 9. However, the 10 per cent baseline tariff imposed by America remains in place.

Due to the 90-day suspension of the 26 per cent additional import duty, Indian exporters are at present paying just 10 per cent baseline tariffs, instead of 26 per cent earlier proposed.

At present, the Trump administration requires approval from the US Congress to bring tariffs below the MFN (most favoured nation) rates. But the administration has the authority to remove the reciprocal tariffs imposed on a number of countries, including India.

India may look at certain commitments from the US on the duty concessions for its labour-intensive sector in the first tranche of the proposed bilateral trade agreement (BTA). Both countries have fixed a deadline to conclude the first phase of the pact by fall (September-October) of this year to more than double bilateral trade to USD 500 billion by 2030.

To boost bilateral trade, India is seeking duty concessions for labour-intensive sectors like textiles, gems and jewellery, leather goods, garments, plastics, chemicals, shrimp, oil seeds, chemicals, grapes, and bananas in the proposed pact with America.

On the other hand, the US wants duty concessions in sectors like certain industrial goods, automobiles (electric vehicles in particular), wines, petrochemical products, dairy, and agriculture items such as apples, tree nuts and GM (genetically modified) crops.

While the import of GM crops from the US continues to remain a non-starter due to regulatory norms in India, New Delhi is open to import of non-GM products like Alpha alpha hay (a kind of cattle feed).

The US remained India's largest trading partner for the fourth consecutive year in 2024-25, with bilateral trade valued at USD 131.84 billion. The US accounts for about 18 per cent of India's total goods exports, 6.22 per cent in imports, and 10.73 per cent in the country's total merchandise trade.

With America, India had a trade surplus (the difference between imports and exports) of USD 41.18 billion in goods in 2024-25. It was USD 35.32 billion in 2023-24, USD 27.7 billion in 2022-23, USD 32.85 billion in 2021-22 and USD 22.73 billion in 2020-21. The US has raised concerns over this widening trade deficit.