India, US Push Ahead with Trade Deal Amid Ongoing Tariff Frictions

The crucial talks for the proposed bilateral trade agreement are gaining momentum between India and the United States. The U.S. Vice President, J.D. Vance is in India and will hold bilateral talks with Prime Minister, Narendra Modi. The visit is significant as India is exploring the possibility of an early tranche during the 90-day tariff pause window. The two sides have also finalised the terms of references (ToRs) for the agreement. A list of Q&As (questions and answers) is discussed here to explain the importance of this visit and implications of high tariffs on China for India.

Q1. What is an ‘early tranche’?

A1. The United States of America and India have aimed for a bilateral trade agreement (BTA), which is a kind of free trade pact. The two have decided to conclude the proposed BTA in two tranches or phases. They have fixed a deadline to conclude the first phase by fall (September-October) of this year. However, India is taking advantage of the 90-day tariff pause window and exploring the opportunity to discuss an early tranche.

Q2. What is the trade between India and the United States?

A2. The United States of America is India’s third-largest import partner and top export partner. India-US bilateral trade data shows that India’s imports from the U.S. totalled USD 43 billion and India’s exports to U.S. totalled USD 80 billion in 2024. Looking ahead, both nations aim to double this trade to $500 billion by 2030, with discussions underway to address tariff issues and expand cooperation in sectors like defense, energy, and technology.

Q3. What India Exports to and Imports from the U.S?

A3. India’s top exports to the U.S. in 2024 were electrical machinery and equipment, pearls and precious stones, pharmaceutical products, nuclear reactors, machinery, etc., and mineral fuels and oils. India’s top imports from the U.S. in 2024 were mineral fuels and oils, pearls and precious stones, nuclear reactors, machinery, etc., electrical machinery and equipment, and optical, photographic, medical, etc. equipment. Visualize data of these commodities in the given chart.

Q4. Has India negotiated free trade agreements in phases earlier?

A4. Yes. India has made negotiations of free trade agreements with Australia. The India-Australia Economic Cooperation and Trade Agreement (ECTA), entered into force on December 29, 2022.

Q5. What is the 90-day tariff pause window announced by the United States?

A5. U.S. President Donald Trump announced sweeping reciprocal tariffs on several countries including India and China, on April 2, 2025. However, on April 9, he announced a 90-day suspension of these tariffs, except for those on China and Hong Kong, as about 75 countries approached America for trade deals.

Q6. What are expectations in the US tariffs?

A6. Pharmaceuticals, semiconductors, and certain energy products are under the exemption category. Earlier this month, the Trump administration expanded this category by including computers, smartphones, and certain other electronics imported mainly from China.

Q7. What are the key elements of the BTA?

The pact has aimed at more than doubling the bilateral trade in goods and services to USD 500 billion by 2030 from the current USD 191 billion.

The Bottom Line

In conclusion, the India-U.S. trade negotiations are progressing positively, with both nations working toward a mutually beneficial agreement that addresses existing trade barriers and sets the stage for a more robust economic partnership in the future. Stay tuned to Export Genius for all updates of trade between India and the United States.