India, US to hold wrap-up session on March 29 on proposed trade pact; talks in early stages: Report

New Delhi: India and the visiting US officials have decided to hold a wrap-up session on Saturday, March 29, morning to conclude the three-day talks on the proposed bilateral trade agreement, government sources said.

They said the discussions are at a "very" early stage.

A team of US officials, headed by Assistant US Trade Representative for South and Central Asia Brendan Lynch, is here for negotiations on the proposed agreement.

"Early stage of discussions are going on," one of the sources said, adding that nothing has been finalised so far.

Commerce and Industry Minister Piyush Goyal on Thursday said the ongoing talks between India and the US for the proposed pact are progressing "well" and will be for the "good" of both nations while protecting India's interests.

The official level deliberations assume significance as US President Donald Trump has announced imposing reciprocal tariffs on April 2 on America's key trading partners, including India.

He has on multiple forums stated that India imposes high tariffs on US goods. The US has already imposed duties on China.

Besides, higher import duties of 25 per cent are imposed on steel and aluminium from March 12. On March 26, Trump announced a sweeping 25 per cent tariff on completely built vehicles (CBUs) and auto parts, a move set to take effect on April 3.

Tariffs are import duties imposed and collected by the government and paid by the companies to bring foreign goods into a country.

India and the US are aiming to conclude the first phase or tranche of the agreement by the fall of 2025 (September-October). They have also set a target to more than double bilateral trade to $500 billion by 2030 from the current over $190 billion.

While the US has demanded duty concessions in sectors like certain industrial goods, automobiles, wines, petrochemical products, 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.

Amid pressure from the US, India in February reduced import duties on bourbon whiskey from 150 per cent to 100 per cent and lowered tariffs on certain varieties of wines. The duty on wines made from fresh grapes, vermouth, certain other fermented beverages, and unadulterated ethyl alcohol with 80 per cent strength has been reduced to 100 per cent.

The customs duty reduction announced in the Budget on products such as motorcycles and synthetic flavouring essences would also benefit American exports.

India has also recently announced the scrapping of the equalisation levy on tech giants like Google.

The Reliance Industries' digital services company Jio Platforms Ltd and Bharti Airtel have signed an agreement with SpaceX to offer Starlink's broadband internet services to its customers in India.

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 experts, India is unlikely to include 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 June 2023, India announced removal of retaliatory import duties on eight US products, including chickpeas, lentils, and apples, which were imposed in 2019 in response to America's measure to increase tariffs on certain steel and aluminium products.

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.